IMF surveillance as a signal to attract foreign investment

Wolfgang Mayer and Alexandros Mourmouras

International Review of Economics & Finance, 2010, vol. 19, issue 4, 562-574

Abstract: Poor governance and endemic corruption hamper the efforts of some developing countries to attract foreign investment. Incentive schemes based on verifiable signals of varying costs and quality can be helpful in encouraging their governments to intensify corruption-control efforts. This paper ranks alternative signals, including surveillance by the IMF and other IFIs (International Financial Institutions), as catalysts for private foreign investments. We demonstrate that the ranking crucially depends on the bargaining strength of governments relative to foreign investors. If foreign lenders control the bargain, IFI signals are the first choice. If governments are in control, IFI signals become the choice of last resort.

Keywords: IMF; surveillance; Signals; Foreign; investment; Corruption; control (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059-0560(09)00121-X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:19:y:2010:i:4:p:562-574

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().