Foreign Investment and Development: The Role of Domestic Policy and International Investment Agreements
The Commonwealth Finance Ministers Reference Report 2008 (London, Commonwealth Secretariat, 2008)
4 Pages Posted: 25 Feb 2009
Date Written: September 1, 2008
All developing countries participate, to greater or lesser degrees, in the global competition for foreign investment. But attracting investment is not the only challenge. Harnessing foreign investment to achieve sustainable development is often even more difficult. What is needed to address these twin challenges varies from one country to the next. This short article argues that for most developing countries creating the right domestic policy environment is necessary but, for some countries at least, will not be sufficient to attract investment or ensure that it contributes to development. New kinds of international investment agreements that do a better job of promoting more stable investment flows and supporting sustainable development are also needed.
Keywords: foreign investment, international economic law
JEL Classification: K33
Suggested Citation: Suggested Citation