Does increased democracy promote or jeopardize foreign direct investment (FDI) inflows to less-developed countries? We argue that democratic institutions have conflicting effects on FDI inflows. On the one hand, democratic institutions hinder FDI inflows by limiting the oligopolistic or monopolistic behaviors of multinational enterprises, facilitating indigenous businesses' pursuit of protection from foreign capital, and constraining host governments' ability to offer generous financial and fiscal incentives to foreign investors. On the other hand, democratic institutions promote FDI inflows because they tend to ensure more credible property rights protection, reducing risks and transaction costs for foreign investors. Hence, the net effect of democracy on FDI inflows is contingent on the relative strength of these two competing forces. Our argument reconciles conflicting theoretical expectations in the existing literature. Empirical analyses of fifty-three developing countries from 1982 to 1995 substantiate our claims. We find that both property rights protection and democracy-related property rights protection encourage FDI inflows; after controlling for their positive effect through property rights protection, democratic institutions reduce FDI inflows. These results are robust against alternative model specifications, statistical estimators, and variable measurements.

http://people.tamu.edu/~quanli/papers/IO_2003_fdidem.pdf

Reversal of Fortunes: Democratic Institutions and Foreign Direct Investment Inflows to Developing Countries

The flow of foreign direct investment into developing countries varies greatly across countries and over time. The political factors that affect these flows are not well understood. Focusing on the relationship between trade and investment, we argue that international trade agreements—GATT/WTO and preferential trade agreements (PTAs)—provide mechanisms for making commitments to foreign investors about the treatment of their assets, thus reassuring investors and increasing investment. These international commitments are more credible than domestic policy choices, because reneging on them is more costly. Statistical analyses for 122 developing countries from 1970 to 2000 support this argument. Developing countries that belong to the WTO and participate in more PTAs experience greater FDI inflows than otherwise, controlling for many factors including domestic policy preferences and taking into account possible endogeneity. Joining international trade agreements allows developing countries to attract more FDI and thus increase economic growth.

/pdf/the-politics-of-foreign-direct-investment-into-developing-4qee8jcb25.pdf

The Politics of Foreign Direct Investment into Developing Countries: Increasing FDI through International Trade Agreements?

This article examines the implications of rising density on the evolution of international institutions. Despite the increase in international institutions scholarship on regimes has continued to embrace the assumption that individual regimes are decomposable from others. We contend that an increasingly common phenomenon is the "regime complex": a collective of partially-overlapping and non-hierarchical regimes. Regime complexes develop in special, often path-dependent ways. They are laden with legal inconsistencies because the rules in one regime are rarely negotiated in the same institution or at the same time as rules in related regimes. The architects of these regimes attempt to avoid the most serious inconsistencies by adopting broad rules that allow for multiple interpretations; in turn, solutions refined through efforts at implementing these rules focus later rounds of negotiation and legalization. We illustrate the concept and the evolution of a regime complex using the rarely-studied issue of plant genetic resources (PGR). Over the last century governments have created property rights in these resources in a Demsetzian process: as new technologies and ideas have made PGR far more valuable, firms and governments have mobilized and clashed over the creation of property rights that allow the appropriation of that value.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID441463_code031002630.pdf?abstractid=441463&mirid=1

The Regime Complex for Plant Genetic Resources

Trade liberalization, market discipline and productivity growth: new evidence from India

Liberal and critical theorists alike claim that the world political economy is becoming globalized. If they are right, leading corporations should gradually be losing their national characters and converging in their fundamental strategies and operations. Multinational corporations (MNCs) should be the harbingers of deep global integration. In fact, recent evidence shows little blurring or convergence at the cores of firms based in Germany, Japan, or the United States. In contrast to expectations now common both inside and outside academia regarding the imminent emergence of a truly global economy, this article shows that MNCs continue to diverge fairly systematically in their internal governance and long-term financing structures, in their approaches to research and development (R&D) as well as in the location of core R&D facilities, and in their overseas investment and intrafirm trading strategies. Durable national institutions and distinctive ideological traditions still seem to shape and channel crucial corporate decisions. Across the leading states of the three regions now commonly referred to as the "Triad," the foundations of corporate markets are not converging.Markets in this sense are not replacing political leadership and the necessity for negotiated adjustments among states.

National Structures and Multinational Corporate Behavior: Enduring Differences in the Age of Globalization

Have leisure times? Read the world trading system law and policy of international economic relations writer by Why? A best seller book worldwide with great worth and material is incorporated with fascinating words. Where? Simply below, in this site you can read online. Want download? Of course offered, download them additionally here. Available documents are as word, ppt, txt, kindle, pdf, rar, and zip.

Simon Webley

Papers

The world trading system: law and policy of international economic relations

Trade liberalization among major world trading areas

Comparative advantage, trade policy and economic development

American Multinationals and American Interests

The politics of the Anglo-American economic special relationship