Idealism, Realism and the Investment Climate in Developing Countries
Written by Mick Moore and Hubert Schmitz, Institute of Development Studies
The question which drives this paper is how, in the political and institutional environments typical of poor countries, public action can bring about substantial increases in productive private investment. ‘Improve the investment climate!’ is the dominant policy advice. This paper reviews what is meant by the investment climate and then concentrates on the institutional dimension of investment climate reform. The standard advice in such reform is that governance through informal relationships should be replaced with governance through formal rules. The paper ends with suggestions for research which is comparative and investigates changes over time.
Read the paper here.