FDI, Globalisation and Economic Development - Towards Reforming National and International Rules of the Game
AbstractThe key analytical and policy question examined in this paper is whether multinational companies and their overseas investment need to be regulated at the national or the international level, in order to address market failures, and to enhance their potential contribution to world welfare. The paper examines two kinds of regulatory regimes: first the current regime and second, a new regime proposed by the European community and Japan at the WTO (ECJ) to institute fresh global rules of the game which will effectively allow multinationals unfettered freedom to invest where they like, whenever they like, how much and in what products. Very briefly, the central conclusion of the paper is that ECJ, despite its important concession of confining itself to only one source of external finance namely FDI, is a flawed proposal both from the perspective of developing and developed countries. Its shortcomings are particularly serious with respect to developing countries as it essentially ignores the developmental dimension altogether. It is emphasized that although the current post-Uruguay Round FDI regime is to be preferred in relation to the ECJ, the former has, nevertheless severe deficits from a developmental perspective. These need prompt action by the international community
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Bibliographic InfoPaper provided by ESRC Centre for Business Research in its series ESRC Centre for Business Research - Working Papers with number wp304.
Date of creation: Mar 2005
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globalisation; foreign direct investment; trade flows; WTO;
Find related papers by JEL classification:
- F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
- F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
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