Experience shows that investment in equities has more favorable effects than investment in debt but that governments are more inclined to liberalize debt flows." The second school argues that even if the expectations of the first school are not fulfilled, there are corollary benefits since foreign capital comes packaged with technological and organisational know-how.
These benefits may be true of equity and foreign direct investments; but not true of debt finance. Professor Eichengreen adds "More generally, evidence of the corollary benefits of capital account liberalisation is open to alternative interpretations." He says "Moreover, there are reasons to worry that capital account liberalisation adopted with an eye toward forcing reform can have costs as well as benefits."