Paper prepared for the book jointly edited by Rabah Aretzki, Catherine Patillo, Marc Quintyn et Min Zhu (2012), Commodity Price Volatility and Inclusive Growth in Low-Income Countries, Washington D.C.: International Monetary Fund (chapter 16, pp. 315-330).

The 2007-2009 crisis, followed by the debt crisis of the euro zone, has further shifted the center of gravity of the world’s economy toward large emerging countries. Nowadays, economic dynamism and growth seem to belong to developing countries, whose heterogeneity remains, however, significant. Each group of countries is confronted with specific problems. Rather than trying to incorporate developing countries into the existing globalization framework, industrialized countries should be ready to negotiate with them the contours of a new governance, better adapted to the ongoing shift and to the defense of essential global public goods. To do this, development aid, once modernized, could prove a suitable instrument and provide the bases for a genuine global public policy.

This paper was written with Jean-Joseph Boillot as the introduction to the Revue d’Economie Financière’s issue that we jointly coordinated on “The Indian financial system. Between openness and modernity”.  It argued that the Indian financial system needs a second wave of reforms.