From: Technotranscendence (neptune@mars.superlink.net)
Date: Wed Jun 20 2001 - 09:04:26 MDT
FW: THE LIGHTHOUSE: June 11, 2001POLITICAL FREEDOM PROMOTES FOREIGN
INVESTMENT from THE LIGHTHOUSE "Enlightening Ideas for Public Policy..."
VOL. 3, ISSUE 23 June 11, 2001
Does globalization promote political repression in developing countries, as
its critics contend? If so, globalization would indeed merit contempt.
However, a new study by economists Philipp Harms and Heinrich Ursprung finds
this pessimistic claim unsupported by evidence.
"The results of our study," write Harms and Ursprung in their new
Independent Institute working paper, "contradict the widespread perception
that international investors are attracted to societies in which political
rights are repressed and workers' representation is curtailed."
In reality, they say, political rights and civil liberties attract foreign
direct investment (FDI).
Harms and Ursprung estimated the FDI per capita of 62 developing and
emerging market countries from 1989 to 1997. They then correlated these
estimates with measures of civil liberties published by Freedom House. They
also took account of other factors that might discourage FDI, such as
illiteracy, inflation and political risks.
The results were clear: The greater a country's civil liberties, the more
foreign direct investment. Far from promoting repression, a country's desire
for investment promotes the extension of civil liberties.
"One is led to conclude that the globaphobic world view is simply not
supported by comprehensive scholarly investigations into these...complex
issues.
See "Do Civil and Political Repression Really Boost Foreign Direct
Investments?" by Philipp Harms and Heinrich W. Ursprung (Independent
Institute Working Paper #36), at:
http://www.independent.org/tii/lighthouse/LHLink3-23-1.html
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