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Politická ekonomie investičních pobídek
[Political economics of investment incentives]

Author

Listed:
  • Miroslav Plojhar
  • Martin Srholec

Abstract

The paper focuses on selective investment incentives, which are aimed primarily to attract foreign direct investment, in the context of the new EU Member States, namely the Czech Republic, Hungary, Poland and Slovakia. We discuss the issue within three closely related dimensions. We point to a potential conflict of interests between host country governments and multinational companies in promoting technology spillovers from foreign direct investment in the host economies. We examine the prisoner dilemma of the host governments in mutual competition for mobile direct investment and a room to achieve multilateral or strengthening regional agreement on investment to reduce a possible wealth reducing content of such policies. Finally, we discuss national context of the investment incentives with regards to the rent-seeking behaviour of various interest groups and contradictory role of the investment promotion agency in the process of decision-making about investment promotion policies. We conclude with brief implications for development policy.

Suggested Citation

  • Miroslav Plojhar & Martin Srholec, 2004. "Politická ekonomie investičních pobídek [Political economics of investment incentives]," Politická ekonomie, Prague University of Economics and Business, vol. 2004(4), pages 449-464.
    • Handle: RePEc:prg:jnlpol:v:2004:y:2004:i:4:id:469:p:451-466
    DOI: 10.18267/j.polek.469
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    References listed on IDEAS

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    1. Theodore H. Moran, 1998. "Foreign Direct Investment and Development: The New Policy Agenda for Developing Countries and Economies in Transition," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 53, October.
    2. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association;National Tax Journal, vol. 52(2), pages 269-304, June.
    3. Baldwin, Richard E. & Krugman, Paul, 2004. "Agglomeration, integration and tax harmonisation," European Economic Review, Elsevier, vol. 48(1), pages 1-23, February.
    4. Greenaway, David & Görg, Holger, 2002. "Much Ado About Nothing? Do Domestic Firms Really Benefit from Foreign Investment?," CEPR Discussion Papers 3485, C.E.P.R. Discussion Papers.
    5. Austan Goolsbee, 1997. "Investment Tax Incentives, Prices, and the Supply of Capital Goods," NBER Working Papers 6192, National Bureau of Economic Research, Inc.
    6. Thomas W. Hertel & Bernard M. Hoekman & Will Martin, 2002. "Developing Countries and a New Round of WTO Negotiations," The World Bank Research Observer, World Bank, vol. 17(1), pages 113-140.
    7. Dirk Willem te Velde, 2002. "Government Policies for Inward Foreign Direct Investment in Developing Countries: Implications for Human Capital Formation and Income Inequality," OECD Development Centre Working Papers 193, OECD Publishing.
    8. Michael P. Devereux & Rachel Griffith & Alexander Klemm, 2002. "Corporate income tax reforms and international tax competition [‘Do domestic firms benefit from direct foreign investment? Evidence from Venezuela’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 17(35), pages 449-495.
    9. P. de Grauwe & F. Camerman, 2002. "How Big are the Big Multinational Companies?," Review of Business and Economic Literature, KU Leuven, Faculty of Economics and Business (FEB), Review of Business and Economic Literature, vol. 0(3), pages 311-326.
    10. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association, vol. 52(n. 2), pages 269-304, June.
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    Cited by:

    1. Peter Bolcha & Alena Zemplinerová, 2012. "Dopad investičních pobídek na objem investic v České republice [The Effect of Investment Incentives on Investment in Czech Republic]," Politická ekonomie, Prague University of Economics and Business, vol. 2012(1), pages 81-100.

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    More about this item

    Keywords

    foreign direct investment; investment incentives; state aid; multilateral agreement on investment; partial interest groups;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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