Recycle, Reduce and Reflect: Information Overload and Knowledge Deficit in the Field of Foreign Investment and the Law

Journal of Law and Society, Vol. 35, No. 1, pp. 67-75, June 2008

13 Pages Posted: 26 Jul 2009

Date Written: 2008

Abstract

Much of my recent research has focused on two questions. First, I have asked whether the nature of host state legal systems is important to foreign investors: is it a determinant of their decisions as to where to locate? Although the dominant theory, led by the World Bank, vigorously asserts that the legal system is very important, my research has shown that this not always the case. Second, I have asked what kind of legal system a foreign investor might be looking for. The dominant theory argues strongly that investors seek legal systems in which limited discretion is given to bureaucrats and corruption is low. But foreign investors are concerned with achieving high predictability and low cost, and I have found that some investors believe these features can be achieved in high discretion and high corruption environments (See Perry-Kessaris, 2004 and 2003; and Perry, 2001).

In the course of this research, it has become clear to me that the World Bank is subjecting empirical researchers and policy makers in this field to a paradoxical combination of information overload and knowledge deficit. In this paper I review World Bank practice in this field to demonstrate that there is great value first, in recycling data such as that produced by the Bank, by which I mean using the data to test new hypotheses, or indeed to confirm the conclusions drawn by the original analysts. However, to meet this objective, the data must be transparent and accessible. Second, there is value in reducing methodological complexity. Third, I argue that there is value in reflecting before we adopt the conclusions of others.

Suggested Citation

Perry-Kessaris, Amanda, Recycle, Reduce and Reflect: Information Overload and Knowledge Deficit in the Field of Foreign Investment and the Law (2008). Journal of Law and Society, Vol. 35, No. 1, pp. 67-75, June 2008. Available at SSRN: https://ssrn.com/abstract=1438194

Amanda Perry-Kessaris (Contact Author)

Kent Law School ( email )

Canterbury, Kent CT2 7NS
United Kingdom

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