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

Author

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  • Ajit Singh
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

Suggested Citation

  • Ajit Singh, 2005. "FDI, Globalisation and Economic Development - Towards Reforming National and International Rules of the Game," Working Papers wp304, Centre for Business Research, University of Cambridge.
    • Handle: RePEc:cbr:cbrwps:wp304
    Note: PRO-1
    as

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    File URL: https://www.jbs.cam.ac.uk/cbrwp304/
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    References listed on IDEAS

    as
    1. Singh, Ajit & Zammit, Ann, 2000. "International Capital Flows: Identifying the Gender Dimension," World Development, Elsevier, vol. 28(7), pages 1249-1268, July.
    2. Manuel Agosin & Roberto Machado, 2005. "Foreign Investment in Developing Countries: Does it Crowd in Domestic Investment?," Oxford Development Studies, Taylor & Francis Journals, vol. 33(2), pages 149-162.
    3. Ajit Singh, 2003. "Capital account liberalisation, free long-term capital flows, financial crises and economic development," Chapters, in: Philip Arestis & Michelle Baddeley & John S.L. McCombie (ed.), Globalisation, Regionalism and Economic Activity, chapter 1, pages 15-46, Edward Elgar Publishing.
    4. Hoekman, Bernard & Saggi, Kamal, 1999. "Multilateral disciplines for investment-related policies," Policy Research Working Paper Series 2138, The World Bank.
    5. C Freeman, 1989. "New Technology and Catching Up," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 1(1), pages 85-99, June.
    6. Singh, Ajit, 1998. "Global Unemployment, Longrun Economic Growth and Labour Market Rigidities: A Commentary," MPRA Paper 24285, University Library of Munich, Germany.
    7. Wood, Adrian, 1995. "North-South Trade, Employment and Inequality: Changing Fortunes in a Skill-Driven World," OUP Catalogue, Oxford University Press, number 9780198290155.
    8. Singh, Ajit, 1977. "UK Industry and the World Economy: A Case of De-industrialisation?," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 1(2), pages 113-136, June.
    9. Singh, A., 1991. "Corporate Takeovers: A Review," Cambridge Working Papers in Economics 9206, Faculty of Economics, University of Cambridge.
    10. Ajit, Singh, 1998. "'Asian capitalism' and the financial crisis," MPRA Paper 24937, University Library of Munich, Germany.
    11. Amsden, Alice H. & Singh, Ajit, 1994. "The optimal degree of competition and dynamic efficiency in Japan and Korea," European Economic Review, Elsevier, vol. 38(3-4), pages 941-951, April.
    12. Ethan Kaplan & Dani Rodrik, 2002. "Did the Malaysian Capital Controls Work?," NBER Chapters, in: Preventing Currency Crises in Emerging Markets, pages 393-440, National Bureau of Economic Research, Inc.
    13. Ajit Singh, 2004. "Labour Standards and the 'Race to the Bottom': Rethinking Globalization and Workers' Rights from Developmental and Solidaristic Perspectives," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 20(1), pages 85-104, Spring.
    14. Agénor,Pierre-Richard & Miller,Marcus & Vines,David & Weber,Axel (ed.), 1999. "The Asian Financial Crisis," Cambridge Books, Cambridge University Press, number 9780521770804, September.
    15. Singh, Ajit, 1995. "Institutional requirements for full employment in advanced economies," MPRA Paper 54990, University Library of Munich, Germany.
    16. Schwartz, Steven, 1982. "Factors Affecting the Probability of Being Acquired: Evidence for the United States," Economic Journal, Royal Economic Society, vol. 92(366), pages 391-398, June.
    17. Joseph E. Stiglitz, 2004. "Capital-market Liberalization, Globalization, and the IMF," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 20(1), pages 57-71, Spring.
    18. Singh, Ajit, 2001. "Foreign direct investments and international agreements: a south perspective," MPRA Paper 24299, University Library of Munich, Germany.
    19. Devra L. Golbe & Lawrence J. White, 1988. "A Time-Series Analysis of Mergers and Acquisitions in the U.S. Economy," NBER Chapters, in: Corporate Takeovers: Causes and Consequences, pages 265-310, National Bureau of Economic Research, Inc.
    20. Lawrence H. Summers, 2000. "International Financial Crises: Causes, Prevention, and Cures," American Economic Review, American Economic Association, vol. 90(2), pages 1-16, May.
    21. Chang, Ha-Joon, 1993. "The Political Economy of Industrial Policy in Korea," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 17(2), pages 131-157, June.
    22. Stiglitz, Joseph E., 2000. "Capital Market Liberalization, Economic Growth, and Instability," World Development, Elsevier, vol. 28(6), pages 1075-1086, June.
    23. Gunther Tichy, 2001. "What Do We Know about Success and Failure of Mergers?," Journal of Industry, Competition and Trade, Springer, vol. 1(4), pages 347-394, December.
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    Cited by:

    1. William Sheng Liu & Frank Wogbe Agbola, 2014. "Regional analysis of the impact of inward foreign direct investment on economic growth in the Chinese electronic industry," Applied Economics, Taylor & Francis Journals, vol. 46(22), pages 2576-2592, August.

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    More about this item

    Keywords

    globalisation; foreign direct investment; trade flows; WTO;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General

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