Since the late 1990s, a fundamental shift has occrred in the pattern of private sector financial flows to developing countries. Debt flows have fallen sharply, while equity flows - mainly in the form of foreign direct investment - have remained comparatively robust. This shift from debt to equity should diminish the volatility of developing countries' external finance and improve their access to technology, markets and management expertise. But much more needs to be done to put development finance on a stable basis.