The International Economics Department of the World Bank organized a conference on portfolio investment in developing countries on September 9-10, 1993 to examine alternative forms of external financing to developing countries. Participants consisted of policy makers, investors, academics, investment bankers, national regulators, and officials of multilateral agencies involved in the monitoring and reporting of portfolio flow data, among others. The papers presented and discussed at the conference addressed trends associated with the rapid increase in portfolio flows to developing countries, the benefits of investing in emerging markets, barriers to such investments, and the issues developing countries must face in this regard. Many of these issues were as yet unexplored, in part due to the lack of complete data on portfolio investment flows to developing countries. This document provides the papers that were presented at this conference, along with their respective discussants ' comments. This document begins with an overview chapter that provides a summary of the key findings that emerged from the conference. It includes papers that focus on the magnitudes and prospects of these portfolio flows and introduces the policy issues that arise. The papers that examine the benefits associated with these flows for both investors and developing countries are provided. It includes papers that address the concerns for developing countries, focusing on the issue of barriers to portfolio flows and security design. Finally, the policy implications for developing countries are considered in the papers provided in this document.