Money Laundering: Muddying the Macroeconomy
Peter J. Quirk
Money laundering can have devastating economic consequences. Fighting it should be a priority for all countries and is not incompatible with financial market liberalization.

Rating the Raters of Country Creditworthiness
Nadeem Ul Haque, Donald Mathieson, and Nelson Mark
Like corporations, countries are rated on their creditworthiness. What criteria do rating agencies apply, and what can countries do to improve their credit ratings?

Central Banking: The Challenges Ahead

Financial System Soundness
Stanley Fischer
Recent financial system crises in both industrial and developing countries have sparked a reexamination of how to prevent and respond to such crises. Better regulation and supervision are the key to dealing with them.

Also in this Issue

What Happened to the Peace Dividend?
Benedict Clements, Sanjeev Gupta, and Jerald Schiff
Recent data on countries' military spending indicate that a sizable peace dividend has been achieved since 1985. How much have countries cut, and how have they allocated the resources this has freed up?

How Indochina's Economies Took Off
John Dodsworth
Favorable structural factors, combined with strong policies, helped Indochina's economies avoid a Soviet-style output collapse in their transition to a market-based system.

How Tax Systems Treat Men and Women Differently
Janet G. Stotsky
Gender bias in tax systems reflects prevailing social norms. Many industrial and some developing countries are reforming their tax systems to reflect changing attitudes about men's and women's roles in society.

Private Capital in Water and Sanitation
David Haarmeyer and Ashoka Mody
Governments are drawing on private initiative and capital to address the deficiencies of water and sewage systems and the need for new facilities. What has their experience been and how can they encourage private investment?

Economic Growth and Income Inequality: Reexamining the Links
Klaus Deininger and Lyn Squire
Many economists have long believed that income disparities increase in the early stages of development, making the poor relatively worse off. Recent research suggests that an unequal distribution of income can hamper growth. What does the evidence show?

Banking Crises in the Baltics
Alex Fleming, Lily Chu, and Marie-Renée Bakker
Banking crises in the Baltic countries have threatened the nascent recovery of their economies. But their banking sectors have emerged generally stronger as a result of the experience.

Departments

Letter from the Editor

World Economy in Transition
Statistical Discrepancies in the World Current Account
John Motala

Development Focus
Economic Trends in the Developing World

Readers' Comments

Books

Future Global Capital Shortages: Real Threat or Pure Fiction? A study by the OECD
reviewed by Robert F. Wescott

Agenda for Africa's Economic Renewal by Benno Ndulu, Nicolas van de Walle, and others
reviewed by Hiroyuki Hino

The Ends of the Earth: From Togo to Turkmenistan, From Iran to Cambodia—A Journey to the Frontiers of Anarchy by Robert D. Kaplan
reviewed by Lant Pritchett

North Africa: Development and Reform in a Changing Global Economy, edited by Dirk Vandewalle
reviewed by Klaus Enders

The Liberalization of Capital Movements in Europe: The Monetary Committee and Financial Integration 1958-94 by Age F.P. Baker
reviewed by S. Kal Wajid

Private Pension Policies in Industrialized Countries: A Comparative Analysis by John A. Turner and Noriyasu Watanabe
reviewed by Louise Fox

Central Banking and Banking Regulation by Rosa María Lastra
reviewed by Manuel Guitián

Socialism, Capitalism, Transformation by Leszek Balcerowicz
reviewed by Gerd Schwartz