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ISI, EOI, and FDI: Foreign Direct Investment Regulation and Political Economy of Development and Market Reform |
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Abstract:
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During and after WWII, developing countries heavily regulated foreign direct investment (FDI), using it to achieve specific economic goals. Countries that substituted imports for locally produced goods sought these investments to grow and diversify their industrial base. Other countries oriented production toward exports, using FDI primarily to access production technologies. These orientations began to shift with the debt crisis of the 1980s as both sets of countries, to varying degrees, sought further integration with world markets. In this more recent period countries seek an expanded role for foreign investment, encouraging greater investment in more sectors as a multifaceted engine for growth and productivity. In this paper I consider 1. variation in FDI regulation across developing countries before and after the debt crisis, and 2. the shift over time towards liberal FDI policies as a component of broader market-oriented economic reforms. I explain these patterns by drawing on a model of FDI’s distributional effects. I test proposed explanations with an original dataset of county and industry-level FDI restrictions that covers over 100 developing countries during the 1970s and 1980s. |
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Association:
Name: Midwest Political Science Association 67th Annual National Conference URL: http://www.indiana.edu/~mpsa/
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Citation:
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MLA Citation:
| Pandya, Sonal. "ISI, EOI, and FDI: Foreign Direct Investment Regulation and Political Economy of Development and Market Reform" Paper presented at the annual meeting of the Midwest Political Science Association 67th Annual National Conference, The Palmer House Hilton, Chicago, IL, <Not Available>. 2010-03-11 <http://www.allacademic.com/meta/p363014_index.html> |
APA Citation:
| Pandya, S. S. "ISI, EOI, and FDI: Foreign Direct Investment Regulation and Political Economy of Development and Market Reform" Paper presented at the annual meeting of the Midwest Political Science Association 67th Annual National Conference, The Palmer House Hilton, Chicago, IL <Not Available>. 2010-03-11 from http://www.allacademic.com/meta/p363014_index.html |
Publication Type: Conference Paper/Unpublished Manuscript Abstract: During and after WWII, developing countries heavily regulated foreign direct investment (FDI), using it to achieve specific economic goals. Countries that substituted imports for locally produced goods sought these investments to grow and diversify their industrial base. Other countries oriented production toward exports, using FDI primarily to access production technologies. These orientations began to shift with the debt crisis of the 1980s as both sets of countries, to varying degrees, sought further integration with world markets. In this more recent period countries seek an expanded role for foreign investment, encouraging greater investment in more sectors as a multifaceted engine for growth and productivity. In this paper I consider 1. variation in FDI regulation across developing countries before and after the debt crisis, and 2. the shift over time towards liberal FDI policies as a component of broader market-oriented economic reforms. I explain these patterns by drawing on a model of FDI’s distributional effects. I test proposed explanations with an original dataset of county and industry-level FDI restrictions that covers over 100 developing countries during the 1970s and 1980s. |
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