Date: Sun, 17 Jun 2001 14:17:12 -0400 From: freematt@coil.com (Matthew Gaylor) Subject: Political Freedom Promotes Foreign Investment To: freematt@coil.com (Matthew Gaylor)
POLITICAL FREEDOM PROMOTES FOREIGN INVESTMENT
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 evience.
"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 thencorrelated 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
Subscribe to Freematt's Alerts: Pro-Individual Rights Issues Send a blank message to: freematt@coil.com with the words subscribe FA on the subject line. List is private and moderated (7-30 messages per week) Matthew Gaylor, (614) 313-5722 ICQ: 106212065 Archived at http://groups.yahoo.com/group/fa/