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Regulatory issues

Foreign direct investment in infrastructure in developing countries: does regulation make a difference? (pdf 77kb)

This article by the United Nations Conference on Trade and Development (UNCTAD) examines the
relationship between the quality of the regulatory framework and foreign direct investment (FDI) in infrastructure in middle and lower income developing countries during the period 1990 to 2002.

The article discusses the following:
- FDI in infrastructure in developing countries
- Governance and FDI
- Regulation and FDI in infrastructure
- Modelling regulation and FDI in infrastructure

The results confirm that FDI's in infrastructure respond positively to an effective domestic regulatory framework. By implication, where regulatory institutions are weak and vulnerable to "capture" by the government, foreign investors may be more reluctant to make a major commitment to large scale infrastructure projects in developing countries.

 

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