FDI, Globalisation and Economic Development - Towards Reforming National and International Rules of the Game

Ajit Singh

Working Papers from Centre for Business Research, University of Cambridge

Abstract: The 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

Keywords: globalisation; foreign direct investment; trade flows; WTO (search for similar items in EconPapers)
JEL-codes: F02 F40 (search for similar items in EconPapers)
Date: 2005-03
New Economics Papers: this item is included in nep-int and nep-pke
Note: PRO-1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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