IDEAS home Printed from
   My bibliography  Save this paper

Incentive Bidding for Mobile Investment: Economic Consequences and Potential Responses


  • Andrew Charlton


Competition among governments to attract foreign direct investment (FDI) has grown significantly. This paper investigates the extent to which the size of incentive packages offered to investors by governments is driven by competitive pressure to attract mobile investment projects. It finds that such competition is in many cases a significant determinant of the size and nature of investment incentives.Competition can have both positive and negative effects on domestic and international welfare. Negative outcomes typically occur when governments offer attraction packages that are larger than the value of the benefits to the host economy, or when governments resort to inefficient incentive instruments.Increased transparency would significantly reduce the scope for negative welfare outcomes. Proper accounting for incentives helps to ensure that expenditure is aligned with policy goals, reduces the potential for corruption and improves the efficiency of the negotiation process ... La concurrence que se font les pouvoirs publics pour attirer les investissements directs étrangers (IDE) s’est nettement intensifiée. Ce Document évalue dans quelle mesure l’ampleur des faveurs accordées aux investisseurs par les pouvoirs publics dépend des pressions concurrentielles exercées pour attirer des projets d’investissement mobiles. Il en ressort que, dans bien des cas, cette concurrence détermine largement la nature et l’étendue des avantages consentis.La concurrence peut avoir des effets à la fois positifs et négatifs sur le bien-être au niveau national et international. Les effets négatifs se manifestent lorsque les pouvoirs publics concèdent à l’investisseur des avantages supérieurs aux bénéfices reçus par l’économie hôte, ou lorsqu’ils ont recours à des incitations inefficientes.Ces résultats négatifs sur le bien-être seraient grandement réduits par des mesures visant à améliorer la transparence. Une comptabilité adéquate des incitations contribuerait à garantir ...

Suggested Citation

  • Andrew Charlton, 2003. "Incentive Bidding for Mobile Investment: Economic Consequences and Potential Responses," OECD Development Centre Working Papers 203, OECD Publishing.
  • Handle: RePEc:oec:devaaa:203-en
    DOI: 10.1787/864178271805

    Download full text from publisher

    File URL:
    Download Restriction: no

    File URL:
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oec:devaaa:203-en. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.