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altUgo Panizza, of UNCTAD's Division on Globalization and Development Strategies, in his usual no-nonsense manner, disentangles capital flows in this Vi multimedia teaching resource, filmed during a course for Geneva-based delegates.

Beginning with a primer on balance of payments and related concepts, he argues that the theory -- that capital should flow from rich to poor countries and that capital account liberalization should lead to higher growth -- does not fit the data.

"From the end of the 90s, something weird started happening, which is exactly the oppossite of what theory predicts," he said. "Developed countries, instead exporting capital, started importing capital," from the South. "This divergence is what we call global imbalances."

He goes on to discuss two reasons for this current state of affairs, including problems with the global financial architecture and a lack of cooperation among countries.

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