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The Institutional Reforms Debate and FDI Flows to the MENA Region: The “Best” Ensemble

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  • Mina, Wasseem Michel

Abstract

This paper empirically examines the theoretical debate on the adoption of a best approach to reforming institutions identified by Rodrik (2008) in the context of property rights protection and FDI flows to eight MENA countries. The first best approach comprises strengthening domestic institutional functions only, while the second best comprises in addition entering into force bilateral investment treaties and the interaction between functions and treaties. Empirically both approaches to reducing investment expropriation risk encourage FDI flows. The positive effect of the second best approach depends on the success of the first best approach, suggesting the two approaches are complementary.

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Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 40 (2012)
Issue (Month): 9 ()
Pages: 1798-1809

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Handle: RePEc:eee:wdevel:v:40:y:2012:i:9:p:1798-1809

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Web page: http://www.elsevier.com/locate/worlddev

Related research

Keywords: institutional reforms; property rights protection; FDI; MENA; first best; second best;

References

References listed on IDEAS
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Citations

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Cited by:
  1. Bassem Kahouli & Anis Omri & Anissa Chaibi, 2014. "Environmental Regulations, Trade, and Foreign Direct Investment: Evidence from Gravity Equations," Working Papers 2014-189, Department of Research, Ipag Business School.
  2. Burger, Martijn & Ianchovichina, Elena & Rijkers, Bob, 2013. "Risky business : political instability and greenfield foreign direct investment in the Arab world," Policy Research Working Paper Series 6716, The World Bank.
  3. Mina, Wasseem, 2013. "United Arab Emirates FDI Outlook," MPRA Paper 51810, University Library of Munich, Germany.
  4. Dalila Nicet-Chenaf & Eric Rougier, 2014. "Source and host country volatility and FDI: A gravity analysis of European investment to Middle East and North Africa," Working Papers hal-00985795, HAL.
  5. Mina, Wasseem, 2013. "Political Risk Guarantees and Capital Flows: The Role of Bilateral Investment Treaties," MPRA Paper 51811, University Library of Munich, Germany.
  6. Wasseem Mina, 2013. "Beyond FDI: The Influence of Bilateral Investment Treaties on Debt," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1325, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  7. Kamel ABDELLAH ( GREThA, CNRS, UMR 5113 & ISG, UNIVERSITE DE TUNIS) & Dalila NICET-CHENAF (GREThA, CNRS, UMR 5113) & Eric ROUGIER (GREThA, CNRS, UMR 5113), 2012. "FDI and macroeconomic volatility: A close-up on the source countries," Cahiers du GREThA 2012-21, Groupe de Recherche en Economie Théorique et Appliquée.

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