Retention and Expansion of Foreign Direct Investment : Political Risk and Policy Responses
Due to its recognized benefits, most countries today regardless of their level of development compete for and dedicate significant resources to attracting foreign direct investment (FDI). Capturing the full positive spillovers of FDI is a long-term...
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| Format: | Working Paper |
| Language: | English |
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World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/387801576142339003/Political-Risk-and-Policy-Responses http://hdl.handle.net/10986/33082 |
| Summary: | Due to its recognized benefits, most
countries today regardless of their level of development
compete for and dedicate significant resources to attracting
foreign direct investment (FDI). Capturing the full positive
spillovers of FDI is a long-term process and requires
regulatory certainty and predictability to enable strategic
business planning. This paper aims to fill this gap in
evidence-based policy making, by contributing to the
understanding of how political risks emanating from
government conduct affect FDI and proposing a tool for
governments to help investors retain and expand investments.
Based on investor survey data and empirical analysis of
investor-state dispute settlement (ISDS), the paper aims to
draw attention to this issue and to highlight that many
countries may inadvertently be losing significant amounts of
FDI. The paper responds to an urgent need for governments to
provide a minimum institutional infrastructure that can
enable a lead agency to identify, track, and manage
conflicts arising between investors and public agencies as
early as possible. |
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