The role of microfinance in developing countries is receiving much attention these days. Microfinance is a positive development; it has clearly helped substantial numbers of poor people escape poverty, and the Nobel Peace Prize awarded to Muhammad Yunus for his pioneering efforts in this area was certainly well deserved.
6 However, microfinance is not a substitute for the institution building I am talking about here. Globalizing to advance institutional reform Now that we understand what kinds of institutions are needed to promote financial development and economic growth, let’s turn to the question of how developing countries can improve the likelihood that these institutions are developed.