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Public Governance, Health and Foreign Direct Investment in Sub-Saharan Africa

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  • Céline Azémar
  • Rodolphe Desbordes

Abstract

Using 1985--2004 yearly panel data for 70 developing countries, including 28 from Sub-Saharan Africa (SSA), the paper finds that once market size is accounted for, SSA's foreign direct investment (FDI) deficit with other regions of the world is mainly explained by the insufficient provision of public goods: relatively low human capital accumulation, in terms of education and health in SSA. On the basis of additional cross-sectional data, the paper finds that in the absence of HIV and malaria, net FDI inflows in the median SSA country could have been one-third higher during 2000--2004, with slightly more than one-half of this deficit explained by malaria. Copyright 2009 The author 2009. Published by Oxford University Press on behalf of the Centre for the Study of African Economies. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org, Oxford University Press.

Suggested Citation

  • Céline Azémar & Rodolphe Desbordes, 2009. "Public Governance, Health and Foreign Direct Investment in Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 18(4), pages 667-709, August.
    • Handle: RePEc:oup:jafrec:v:18:y:2009:i:4:p:667-709
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    File URL: http://hdl.handle.net/10.1093/jae/ejn028
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    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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