The string of financial crises in developing countries in the second half of the 1990s shook the confidence of many in global financial markets. At the same time, aid, on the decline through much of the decade, was increasingly criticized as ineffective. Together these experiences called into question the long-held view that international resource transfers—both private and official—play a significant and positive role in economic development. However, participants at this seminar on capital flows concluded that, quite to the contrary, international financial flows to developing countries are perhaps even more valuable than traditionally thought—and that the prospects for using them effectively continue to improve. These flows work to transfer resources across national borders, from rich countries to poor ones, and to create and realize investment opportunities. But they can have an even greater influence on development by stimulating improvements in a country’s policies and institutions and keeping them sound. They can thus reinforce countries’ initiatives to step up productivity and efficiency in the economy. The conference also highlighted ongoing international initiatives to leverage the far-reaching potential of international financial flows.