The international transfer of capital for investment purposes has had a profound effect in determining the direction and profile of world economic development and political change. Historically, critics on the left have equated the export of capital with financial imperialism, while in recent years critics on the right have accused the American government of selling the nation's birthright to the Japanese. It is also the case that in the last century the rapid development of Australia, Canada, and the United States were at least partially underwritten by massive capital transfers from Britain, and in this century the reemergence of Germany and Japan from the devastation of the Second World War can be attributed in some important measure to capital transfers from the U.S. There is little doubt that the existing global distribution of economic activity has been affected by almost two centuries of international capital transfers. Yet, despite those two hundred years of history and rhetoric, very little is actually known about the exact relationship among international capital transfers, the transfer of institutional technology, and the diffusion of economic growth. The purpose of this project is to develop a basis for analyzing these relationships. This is important because it will give us a better understanding of the role of foreign and domestic capital markets in promoting economic growth and development. Specifically, the research will focus on the role of British international capital flows in the late nineteenth and early twentieth centuries in promoting development in Australia, Canada, the United States, and Argentina. The study will be concerned with the mechanisms of international capital transfers, the diffusion of financial institutional forms from Britain to the other four countries, and adaptations of these institutional forms to local conditions and requirements. Finally, it will analyze the distribution of British capital among sectors and organizational forms, and it will attempt to assess the impact of British capital on local development.
