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151. How Should States Own? Heinisch v. Germany and the Emergence of Human Rights-Sensitive State Ownership Function

Author:
Mikko Rajavuori
Publication Date:
07-2015
Content Type:
Journal Article
Abstract:
State ownership is thriving. Emerging economies are extending their growing economic power outward through sovereign wealth funds. State-owned multinationals have become top sources of foreign direct investment. Bailouts have recreated powerful state ownership structures in regions where private ownership has traditionally prevailed. The state is back – in shareholder capacity. Approaching the rise of state ownership from a human rights perspective, this article submits that a new conceptualization of state ownership function is emerging. State ownership provides a strong link connecting corporate actions with the international human rights system. Yet the conventional methods used to integrate state ownership in human rights treaty bodies’ discretion seem unable to grasp the changing economic role of governments in the global economy. The article suggests that the notion of the ‘public shareholder’, introduced by the European Court of Human Rights in Heinisch v. Germany (2011), provides a useful lens for interrogating how states should govern the human rights performance of corporations through ownership. When exposed to the recent practice of a range of United Nations treaty bodies, internationalizing state ownership activity becomes framed in human rights terms. In this vision, the whole ownership function becomes a site for turning companies in the state’s portfolio into responsible corporate citizens who take the impact of human rights seriously. Specifically, treaty bodies should advise states to seek human rights governance through private mechanisms in the capacity of the shareholder. In the process, human rights’ checks and balances should constitute a counterweight for market-based initiatives that regulate state activity in the capacity of the shareholder.
Topic:
Human Rights, International Law, Treaties and Agreements, Foreign Direct Investment, Economies, and Courts
Political Geography:
Europe, Norway, and Germany

152. M. Sornarajah. Resistance and Change in the International Law on Foreign Investment

Author:
Harm Schepel
Publication Date:
10-2015
Content Type:
Journal Article
Abstract:
In 1994, Muthucumaraswamy Sornarajah published the first edition of his treatise, The International Law on Foreign Investment. There, he sought to demonstrate that investment law as a separate branch of international law was ‘in the process of development’ and could and should be isolated for separate study. Organizing his material from the disparate sources of domestic law, contract-based arbitration and public international law along the overarching tension between the interests of developing countries and those of traditionally capital-exporting states, his stated aim was to ‘help in the identification of the nature of the disputes’, which would lead, in turn, to the ‘formulation of acceptable solutions’. The treatise was a well-timed pioneering effort that rightfully earned the author a lasting reputation as one of the founding fathers and towering figures of the academic discipline. There seems to be no one better placed, then, to ask, 20 years on, what happened or, rather, what went wrong. Investment law has developed with breathtaking speed into a (very) separate branch of international law – yes – but almost entirely on the waves of treaty-based investor–state arbitration, which has all but eclipsed contractual and domestic processes, at least in terms of academic interest. And this system has, in the eyes of Sornarajah and many others, rather spectacularly failed to lead to ‘acceptable solutions’, especially for developing countries.
Topic:
International Law, Treaties and Agreements, Foreign Direct Investment, Neoliberalism, and Book Review
Political Geography:
Europe and United States of America

153. Economic Recovery in Somalia

Author:
Timothy Wilson
Publication Date:
01-2015
Content Type:
Journal Article
Journal:
Bildhaan: An International Journal of Somali Studies
Institution:
Macalester College
Abstract:
There were high hopes for a brighter future. After more than two decades of conflict, political uncertainty, multiple droughts and Soma- lia’s worst famine in sixty years, the landscape began to change. The Federal Government lost its transitional status and became officially of State, John Kerry. It appeared that the recovery was not just political. Economic for- tunes were improving as well. Trading activity began to increase again. Shops reopened, rising numbers of diaspora started return- ing and investment firms began opening in Mogadishu. The national post service resumed operations. The Central Bank Act was passed, which simultaneously gave the institution a stronger mandate as well 3 as preclude it from lending to the Government. A veritable construc- tion boom kicked off in Mogadishu, the city received its first ATM cash machine and in June 2015, an agreement between MasterCard and a Somali bank launched the first ever domestic issuance of debit cards. The Wall Street Journal wrote of ‘glimmers of hope’4 while Afri- can Development Bank wrote of a ‘turning point’ due to the ‘positive political and security developments as well as the commitment of the international community.’5 Emerging from the clamour of countless conferences, consultations, summits and high-level meetings, a belief was emerging that this time, something was different. This time, Soma- lia was recovering. Or was it? What turn did Somalia take? As the Federal Government approaches its fifth year, new developments have raised concern over the trajectory and pace of progress. The Prime Minister was dismissed by a no-confidence motion in December 2014. The new Prime Minister, Mr Omar Abdirashid Ali Sharmake, took three attempts to success- fully appoint a new cabinet endorsed by parliament. Concerns about corruption have threatened the steady flow of development finance. High profile attacks by Al Shabaab, both within Somalia and beyond, have raised questions about whether the organisation can be con- tained. Meanwhile, instability in Yemen has led to large numbers of refugees arriving into Somalia. It seems timely, therefore, to reassess the pace of progress and trajectory of recovery in Somalia. More than that, it is essential to examine whether economic recovery is occurring at the same pace and align- ment with political and social recovery. If this is not the case, as we will argue, peace-building gains may be temporary. The roots of conflict are grown in the fertile soil of economic desperation. The contribution of this article is to provide an overview of economic recovery in Somalia that is largely absent from the academic litera- ture. We collate and summarise the most recent quantitative statistics available and match these against qualitative information, including government reports and economic analysis. Our primary conclusion is a positive one; for the first time in more than two decades, Soma- lia’s economy is finally beginning to recover. Growth has returned. New market opportunities are being generated. The trade structure is diversifying and confidence is rising among investors, the diaspora and donors. To be clear, this trajectory is fragile. Political uncertainties and the looming arrival of oil exploration are threats that we discuss in this regard. Nonetheless, our primary thesis is that the five years since the establishment of the Federal Government has been, on balance, a positive period for economic reconstruction in Somalia. Our paper is structured as follows. We first make the case for the importance of economic development despite the massive social and political challenges that prevail in Somalia. We then outline the path- way to recovery that has been delineated by the Federal Government. We assess progress along this route and then identify some of the major threats to further progress.
Topic:
Economics, International Trade and Finance, Foreign Direct Investment, and Recovery
Political Geography:
Africa and Somalia

154. Identifying Foreign Suppliers in U.S. Import Data

Author:
Fariha Kamal and Ryan Monarch
Publication Date:
08-2015
Content Type:
Commentary and Analysis
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Relationships between firms and their foreign suppliers are the foundation of international trade, but data limitations and reliability concerns make studying such relationships challenging. We evaluate and enhance supplier information in U.S. import data and present new facts about importer-exporter relationships. Count of foreign exporters from U.S. import data tends to exceed those from source country data, especially from China. The pattern of U.S. imports from origin countries changes substantially by tracing trade back to the supplier's location instead. Related-party relationships trade more, while larger countries have more relationships.
Topic:
International Cooperation, Foreign Direct Investment, Business, Trade, Data, and Imports
Political Geography:
North America and United States of America

155. Foreign investments in Uganda's oil sector: linkages and issues for the local economy

Author:
Anne Mette Kjær
Publication Date:
03-2014
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
The Ugandan economy resembles many other economies in sub-Saharan Africa in that it has a large subsistence sector, relies on a few primary commodities for export and depends on aid to finance its public services. Oil and minerals have so far not been important to the economy. However, this might change as an estimated 3.5 billion barrel oil reservoir has been discovered in Uganda's Western and Northwestern Albertine Graben. Minerals have also been found and are being sold off as concessions. If oil revenues start to be mobilized as currently planned (2016-17), significant changes in not only government finance but also in the governments' relationships with donors and in state–society relations are likely to occur. The consequences for local communities and the environment are also likely to be significant.
Topic:
Development, Economics, Oil, Natural Resources, Foreign Aid, Fragile/Failed State, and Foreign Direct Investment
Political Geography:
Uganda and Africa

156. From enclave to linkage economies? A review of the literature on linkages between extractive multinational corporations and local industry in Africa

Author:
Michael W. Hansen
Publication Date:
02-2014
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
If African developing countries are to benefit fully from the current boom in foreign direct investment (FDI) in extractives (i.e. mining and oil/gas), it is essential that the foreign investors foster linkages to the local economy. Traditionally, extractive FDI in Africa has been seen as the enclave economy par excellence, moving in with fully integrated value chains, extracting resources and exporting them as commodities having virtually no linkages to the local economy. However, new opportunities for promoting linkages are offered by changing business strategies of local African enterprises as well as foreign multinational corporations (MNCs). MNCs in extractives are increasingly seeking local linkages as part of their efficiency, risk, and asset-seeking strategies, and linkage programmes are becoming integral elements in many MNCs' corporate social responsibility (CSR) activities. At the same time, local African enterprises are eager to, and increasingly capable of, linking up to the foreign investors in order to expand their activities and acquire technology, skills and market access. The changing strategies of MNCs and the improving capabilities of African enterprises offer new opportunities for governments and donors to mobilize extractive FDI for development goals. This paper seeks to take stock of what we know about the state of and driving forces of linkage formation in South Sahel Africa extractives based on a review of the extant literature. The paper argues that while MNCs and local enterprises by themselves will indeed produce linkages, the scope, depth and development impacts of linkages eventually depend on government intervention. Resource-rich African countries' governments are aware of this and linkage promotion is increasingly becoming a key element in their industrialization strategies. A main point of the paper is that the choice between different linkage policies and approaches should be informed by a firm understanding of the workings of the private sector as well as the political and institutional capacity of host governments to adopt and implement linkage policies and approaches.
Topic:
Development, Economics, Markets, Foreign Aid, and Foreign Direct Investment
Political Geography:
Africa

157. The Development of Natural Resource Linkages in Mozambique: The Ruling Elite Capture of New Economic Opportunities

Author:
Lars Buur
Publication Date:
03-2014
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
This paper explores linkage creation in Mozambique related to mega-projects in natural resource extraction and development from a political economy perspective. It explores through a focus on linkage development related to extractive industries in Mozambique the 'best practice' attempts between commodity producers and local content providers. The paper argues that a relatively elaborate state organizational and institutional setup based on policies, strategies and units with funding tools has emerged over time in order to begin to reap the benefits of large-scale investments in the extractive sectors. However, despite the formal acknowledgement, very little has been achieved with regard to forward and backward linkages, state institutions are often despite the official government rhetoric of importance simply bypassed not only by foreign investors, but also by the political leadership.
Topic:
Development, Economics, International Trade and Finance, Political Economy, Natural Resources, and Foreign Direct Investment
Political Geography:
Africa

158. A High-Carbon Partnership? Chinese-Latin American Relations in a Carbon-Constrained World

Author:
Timmons Roberts and Guy Edwards
Publication Date:
03-2014
Content Type:
Working Paper
Institution:
The Brookings Institution
Abstract:
China's rapidly increasing investment, trade and loans in Latin America may be entrenching high-carbon development pathways in the region, a trend scarcely mentioned in policy circles. High-carbon activities include the extraction of fossil fuels and other natural resources, expansion of large-scale agriculture and the energy-intensive stages of processing natural resources into intermediate goods. This paper addresses three examples, including Chinese investments in Venezuela's oil sector and a Costa Rican oil refinery, and Chinese investment in and purchases of Brazilian soybeans. We pose the question of whether there is a tie between China's role in opening up vast resources in Latin America and the way those nations make national climate policy and how they behave at the United Nations Framework Convention on Climate Change (UNFCCC) negotiations. We focus on the period between the 2009 Copenhagen round of negotiations and the run-up to the Paris negotiations scheduled for 2015, when the UNFCCC will attempt to finalize a successor agreement to the Kyoto Protocol.
Topic:
Agriculture, Development, International Trade and Finance, Oil, Natural Resources, and Foreign Direct Investment
Political Geography:
China and Latin America

159. The Wisdom of Crowd-Funders: What Motivates Cross-Border Private Development Aid?

Author:
Homi Kharas and Raj M. Desai
Publication Date:
01-2014
Content Type:
Working Paper
Institution:
The Brookings Institution
Abstract:
The rapid growth in crowd-funded private development aid allows an examination of the preferences of philanthropic individuals with respect to international causes. Using survival analysis, we analyze the rate at which loan requests are funded through an internet-based nonprofit organization that bundles contributions from individuals and transfers them as loans to borrowers in developing countries. We find little evidence for the view that crowd-funders behave as either official aid donors or as selfish aid-givers. Rather, our results show that private aid contributions are motivated by associational communities that link citizens in donor countries to those in recipient countries - in particular, through migrant and diaspora networks - and that, as a result, their giving may be considered a complement to official aid.
Topic:
Development, Non-Governmental Organization, Foreign Aid, and Foreign Direct Investment
Political Geography:
United States

160. Latin America's Changing Global Connections

Author:
Leani García
Publication Date:
04-2014
Content Type:
Journal Article
Journal:
Americas Quarterly
Institution:
Council of the Americas
Abstract:
There's no denying it; whether it's share of trade or percent of foreign direct investment (FDI) in the hemi sphere, the U.S.' economic presence has decreased. Even when the U.S. didn't slip a place in terms of a trade partner, its overall share of countries' imports or exports declined across the board, while other countries' increased—especially China's. In the same period, in Argentina and Brazil, the share of U.S. FDI declined by 22% and 27%, respectively.
Topic:
Economics and Foreign Direct Investment
Political Geography:
Brazil, Argentina, and Latin America

161. Regional concentration of FDI involves trade-offs in post-reform India

Author:
Peter Nunnenkamp, Wan-Hsin Liu, and Frank Bickenbach
Publication Date:
03-2014
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
P. Chidambaram, India's Minister of Finance, claimed that "FDI worked wonders in China and can do so in India." However, China's example may also point to the limitations of foreign direct investment (FDI) liberalization in promoting the host country's economic development. FDI in China is heavily concentrated in the coastal areas, and previous studies have suggested that this has contributed to the increasing disparity in regional income and growth since the late 1970s.
Topic:
Development, Economics, International Trade and Finance, and Foreign Direct Investment
Political Geography:
China, South Asia, and India

162. Multilateral investment disciplines: Don't forget the GATS

Author:
Rudolf Adlung
Publication Date:
03-2014
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
A number of recent studies have discussed the implications of most-favored-nation (MFN) clauses in bilateral investment treaties (BIT s) and the possible need for, and role of, a multilateral framework for investment. Surprisingly, the relevance of existing multilateral disciplines, in particular under the General Agreement on Trade in Services (GATS), is seldom acknowledged in this context.
Topic:
Economics, International Trade and Finance, Treaties and Agreements, and Foreign Direct Investment

163. The case for a framework agreement on investment

Author:
Gary Hufbauer and Sherry Stephenson
Publication Date:
03-2014
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
In Columbia FDI Perspectives, No. 102, Axel Berger claimed that the debate over a multilateral framework for investment is futile. We disagree. Following its achievements at the 9th Ministerial Conference in Bali, Indonesia, the World Trade Organization (WTO) should launch negotiations to draft a 21st century Investment Framework Agreement (IFA).
Topic:
Economics, International Trade and Finance, Markets, Treaties and Agreements, and Foreign Direct Investment
Political Geography:
Colombia

164. The "spaghetti bowl" of IIAs: The end of history?

Author:
Joachim Karl
Publication Date:
02-2014
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
In his famous book, "The End of History and the Last Man", published in 1992, Francis Fukuyama argued that Western democracy represents the end point of the socio-cultural evolution of humanity and the final form of government.
Topic:
Economics, International Trade and Finance, Markets, Treaties and Agreements, and Foreign Direct Investment
Political Geography:
France

165. Recalibrating interpretive authority

Author:
Anthea Roberts
Publication Date:
01-2014
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
There have been many calls for a rebalancing of investor protection and state sovereignty in the investment treaty system. However, another equally important shift is underway: the recalibration of interpretive authority between treaty parties and arbitral tribunals. In newer-style investment treaties, states are increasingly protecting and enhancing their role in interpreting and applying their treaties.
Topic:
Economics, Government, International Trade and Finance, Markets, Treaties and Agreements, and Foreign Direct Investment

166. The China-United States BIT negotiations: A Chinese perspective

Author:
Sheng Zhang
Publication Date:
01-2014
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
The China-US bilateral investment treaty (BIT) negotiations have attracted attention due to the relative size and weight of both economies. Despite broad consensus about the importance of such a treaty, there is considerable debate about its shape and content. The debate is reflected in two recent Columbia FDI Perspectives. Donnelly argued that a China-US BIT should be modeled on the US Model BIT without "splitting the difference between Chinese and US positions", and that the possibility of meaningful BIT negotiations are "really up to China at this point".
Topic:
Economics, Globalization, International Trade and Finance, Bilateral Relations, Foreign Direct Investment, and Governance
Political Geography:
United States, China, Europe, and Colombia

167. Launching a New Chapter in U.S.-Africa Relations

Author:
Richard Downie and Jennifer G. Cooke
Publication Date:
02-2014
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
Africa's changing economic landscape is prompting a shift in how U.S. policymakers view the continent. High growth rates, new technologies, and a rapidly expanding consumer class are driving greater global competition for investment and access to potential export markets, and the United States is recognizing that it will need to step up its game to remain relevant and influential in an increasingly crowded and competitive environment. This will mean placing a stronger emphasis on strengthening trade and investment ties and encouraging U.S. companies to take fuller advantage of expanding opportunities. Playing up these opportunities will not only serve long-term U.S. commercial interests in Africa but will serve U.S. development and diplomatic objectives as well. U.S. investments, done right, can have long-term development impacts in Africa, through technology and knowledge transfer, training, systems development, and partnerships. And a new, more optimistic engagement with Africa's citizens and entrepreneurs will have strong resonance with the continent's up-and-coming generation, creating links based on enduring mutual interest.
Topic:
Diplomacy, Economics, International Trade and Finance, Markets, and Foreign Direct Investment
Political Geography:
Africa and United States

168. A New Development Agenda

Author:
Daniel F. Runde and Scott Miller
Publication Date:
02-2014
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
The link between economic development and state security has been well established but is still too often overlooked. Former secretary of defense Robert Gates argued in support of development efforts as a form of “preventative diplomacy,” preventing the conditions where violent crises occur that may require more aggressive intervention. For example, rising food prices in Egypt have been cited as a major instigator for the protests that overthrew Hosni Mubarak. That does not mean that Mubarak could have stayed in power if only food were more affordable, but higher levels of economic development and the concurrent factors that encourage it could have made the transition more stable and less violent.
Topic:
Development, Economics, International Cooperation, International Trade and Finance, Markets, and Foreign Direct Investment
Political Geography:
United States

169. Which host country government actors are most involved in disputes with foreign investors?

Author:
Nathan M. Jensen and Jeremy Caddel
Publication Date:
03-2014
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Foreign direct investors increasingly use investment dispute-settlement mechanisms to resolve investment disputes and reduce political risk. Using data from the International Centre for Settlement of Investment Disputes (ICSID), the major forum of international investment arbitration, we cataloged the government actors involved in disputes and the actions that led to arbitration. Existing case-based studies of investment arbitration have provided general inferences about the actors involved, but we contribute to the literature in political science and economics by systematically documenting these patterns of behavior.
Topic:
Economics, International Trade and Finance, Foreign Direct Investment, and Governance

170. China needs to complement its "going-out" policy with a "going-in" strategy

Author:
Karl P. Sauvant and Victor Z. Chen
Publication Date:
05-2014
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
China's rising outward foreign direct investment (OFDI) faces rising skepticism abroad. This is partly the result of the leading role of state-owned enterprises in her OFDI (and the fear that it serves non-commercial purposes), the speed with which this investment has grown, the negative image of the home country in some quarters, and the challenges it poses to established competitors. Moreover, Chinese multinational enterprises (MNEs) may not always keep in mind that host countries see FDI as a tool to advance their own development and hence seek maximum benefits from it.
Topic:
Economics, International Trade and Finance, and Foreign Direct Investment
Political Geography:
China and Asia

171. High Tech: The Next Wave of Chinese Investment in America

Author:
Daniel H. Rosen and Thilo Hanemann
Publication Date:
04-2014
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
WHILE CHINA STARTED INVESTING AROUND THE WORLD in the early 2000s, the first waves of Chinese overseas investment targeted mostly extractive mining activities in developing countries and resource-rich advanced economies such as Australia and Canada. Over the past five years, however, Chinese capital has begun to flow into non-extractive sectors in advanced economies, increasingly targeting technology- and innovation-intensive industries. Initially, the surge of Chinese outward foreign direct investment (OFDI) in the United States largely responded to opportunities in energy and real estate, but access to technology and innovation is now becoming an important driver. In the first quarter of 2014 alone, Chinese investors announced high-tech deals worth more than $6 billion, including the takeovers of Motorola Mobility, IBM's x86 server unit, and electric carmaker Fisker.
Topic:
Economics, International Trade and Finance, and Foreign Direct Investment
Political Geography:
China, America, Canada, Asia, and Australia

172. Moral Hazard? 'Mega' public-private partnerships in African agriculture

Author:
Robin Willoughby
Publication Date:
09-2014
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
After decades of underinvestment in agriculture, African governments are rightly looking at how best to mobilize funding for the sector. Donors in turn are keen to reverse a trend of neglect and to support initiatives that are simultaneously likely to enhance productivity, improve livelihoods and increase private sector investment. Private investors, concurrently, are looking for new consumer markets and production opportunities in Africa.
Topic:
Agriculture, Food, Famine, and Foreign Direct Investment
Political Geography:
Africa

173. Investing for the Few: The IFC's Health in Africa initiative

Author:
Anna Marriott and Jessica Hamer
Publication Date:
09-2014
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
World Bank Group President Jim Yong Kim has publicly stated that achieving universal health coverage (UHC) and equity in health are central to reaching the two new overarching World Bank Group goals to end extreme poverty by 2030 and boost shared prosperity. Jim Kim has also rightly emphasized the need to close the gap in access to quality health services for the poorest 40 percent of the population and to eliminate point-of-service payments that impoverish people in every country.
Topic:
Government, Health, Foreign Direct Investment, World Bank, and Health Care Policy
Political Geography:
Africa

174. Sergio Cabral Filho, former Governor of Rio de Janeiro, Brazil

Author:
Sergio Cabral Filho
Publication Date:
05-2014
Content Type:
Video
Institution:
Columbia University World Leaders Forum
Abstract:
This World Leaders Forum program, titled "Rio de Janeiro: from Ostracism to Protagonism" features an address by Sergio Cabral Filho, former Governor of Rio de Janeiro, Brazil. Introduction and Moderated by Lee C. Bollinger, President, Columbia University in the City of New York.
Topic:
Development, Emerging Markets, Political Economy, and Foreign Direct Investment
Political Geography:
New York, Brazil, and Latin America

175. The rise of FDI income, and what it means for the balance of payments of developing countries

Author:
Miguel Pérez Ludeña
Publication Date:
05-2014
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Multinational enterprises (MNEs) multiplied their profits made in developing countries by four between 2002 and 2011 (at current prices). In Latin America and the Caribbean, they rose from US$20 billion in 2002 to US$113 billion in 2011. The growth rate has been even higher in Africa and China, but much lower in developed countries. This rise is explained by an increase in FDI stock in developing economies and the higher average profitability of MNEs.
Topic:
Economics, International Trade and Finance, and Foreign Direct Investment
Political Geography:
Africa, China, and Latin America

176. Government-held equity in foreign investment projects: Good for host countries?

Author:
Louis T. Wells
Publication Date:
02-2014
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
A recent Perspective concluded that, in countries given to sudden shifts in policy, "a host country government equity stake in a project may decrease project risk by giving the state a reason not to demand a renegotiation." An investor may benefit, but does the host country? In my experience, rarely.
Topic:
Development, Economics, International Trade and Finance, and Foreign Direct Investment

177. The Transatlantic Trade and Investment Partnership: A critical perspective

Author:
Rainer Geiger
Publication Date:
04-2014
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Launched in July 2013 by the European Union and the United States, the Transatlantic Trade and Investment Partnership (TTIP) represents an important effort to reach a comprehensive economic agreement between two major trading partners. As has been pointed out, the project offers great opportunities for liberalizing trade and investment and regulatory convergence. Its level of ambition implies high risks, but despite negotiators' initial optimism, its success is far from certain.
Topic:
Economics, International Trade and Finance, Treaties and Agreements, and Foreign Direct Investment
Political Geography:
United States and Europe

178. Perspectives on topical foreign direct investment issues

Author:
John Gaffney and James Nicholson
Publication Date:
06-2014
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
In their contribution to the FDI Perspectives series, Baiju Vasani and Anastasiya Ugale drew attention to an emerging trend in favor of the so-called "costs follow the event" (CFtE) (or loser pays) approach, which is in contrast to the more "traditional" approach under which parties share the costs of arbitration equally, with each party covering its own legal fees.
Topic:
Economics, International Trade and Finance, and Foreign Direct Investment

179. Withdrawing incentives to attract FDI: Can host countries put the genie back in the bottle?

Author:
Anna De Luca
Publication Date:
07-2014
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
Many governments offer incentives to attract foreign direct investment (FDI). For example, the renewable energy sector has benefitted from large national incentive schemes in the past decade. However, the withdrawal of such incentives can lead to investors bringing investment treaty claims against host countries. This Perspective looks at some claims host countries face from investors in the renewable energy sector and their implications.
Topic:
Economics, International Trade and Finance, and Foreign Direct Investment
Political Geography:
Italy

180. The Political Economy of Bad Data: Evidence from African Survey Administrative Statistics

Author:
Amanda Glassman and Justin Sandefur
Publication Date:
07-2014
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
Across multiple African countries, discrepancies between administrative data and independent household surveys suggest official statistics systematically exaggerate development progress. We provide evidence for two distinct explanations of these discrepancies. First, governments misreport to foreign donors, as in the case of a results-based aid program rewarding reported vaccination rates. Second, national governments are themselves misled by frontline service providers, as in the case of primary education, where official enrollment numbers diverged from survey estimates after funding shifted from user fees to per pupil government grants. Both syndromes highlight the need for incentive compatibility between data systems and funding rules.
Topic:
Development, Foreign Aid, Foreign Direct Investment, Governance, and Developing World
Political Geography:
Africa

181. The Quality of Official Development Assistance 2014

Author:
Nancy Birdsall, Homi Kharas, and Nabil Hashmi
Publication Date:
07-2014
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
The Quality of Official Development Assistance (QuODA) measures donors' performance on 31 indicators of aid quality to which donors have made commitments. The indicators are grouped into four dimensions associated with effective aid: maximizing efficiency, fostering institutions, reducing the burden on partner countries, and transparency and learning. The 2014 edition finds that donors are overall becoming more transparent and better at fostering partner country institutions but that there has been little progress at maximizing efficiency or reducing the burden on partner countries. The World Bank's concessional lending arm, the International Development Association (IDA), performs very well in QuODA, ranking in the top 10 of 31 donors on all four dimensions. The United States ranks in the bottom half of all donors on three of the four dimensions of aid quality and last on reducing the burden on partner countries. The United Kingdom ranks in the top third on three of four dimensions of aid quality and scores particularly well on transparency and learning. The Global Fund ranks in the bottom third on fostering institutions but ranks in the top third on the other three dimensions of aid quality, including the top spot in maximizing efficiency.
Topic:
Foreign Policy, Development, Economics, Foreign Aid, and Foreign Direct Investment
Political Geography:
United States and United Kingdom

182. The China-EU BIT: The emerging "Global BIT 2.0"?

Author:
Wenhua Shan and Lu Wang
Publication Date:
08-2014
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
Since China and the European Union (EU) announced their decision to negotiate a bilateral investment treaty (BIT) at the 14th China-EU Summit in February 2012, the two sides have engaged in two rounds of negotiations. If successful, it will be the first standalone EU BIT, a BIT between the world's largest developed economy and the world's largest developing economy, and will occupy a unique place in the history of BIT negotiations.
Topic:
Economics, International Trade and Finance, Bilateral Relations, and Foreign Direct Investment
Political Geography:
China, Europe, and Asia

183. Morocco's Emergence as a Gateway to Business in Africa

Author:
J. Peter Pham and Ricardo Rene Laremont
Publication Date:
08-2014
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
Africa is home to seven of the world's ten fastest-growing economies. By 2050, the continent's population is expected to overtake India's and China's, doubling to two billion people. Moreover, those two billion Africans will be younger than their counterparts in every other region of the world and will account for one in four workers globally by mid-century. Africa's rich endowment of natural resources, including about 30 percent of the world's known reserves of minerals and 60 percent of the planet's uncultivated arable land, is already well-known to investors.
Topic:
Security, Economics, International Trade and Finance, and Foreign Direct Investment
Political Geography:
Africa, China, and Morocco

184. Iran and Kazakhstan Relations: A Geopolitical Analysis

Author:
Elaleh Kooalee, Amir Ebrahimi, and Simin Shirazi Mougouee
Publication Date:
12-2014
Content Type:
Journal Article
Journal:
Iranian Review of Foreign Affairs
Institution:
Center for Strategic Research (CSR)
Abstract:
Kazakhstan needs the short transit route leading to open waters to supply its demands and export oil and gas to international markets. Iran's territorial status in the heart of Eurasia, has offered new capabilities for commerce, industry, and development to this country. But some factors such as the geopolitics of the region, having the second largest resources of energy in the world, and willingness to allow the presence of trans-regional powers with the aim to reduce dependence on Russia and attract foreign investment, has resulted in the presence of these powers in this country and has created serious obstacles for Iran's more effective participation. The main question of this paper is how has Iran benefited from the opportunity to develop relations with Kazakhstan? The authors analyze the most important factors regarding Iran's geopolitical position and status with regards to the development of its relations with Kazakhstan.
Topic:
Development and Foreign Direct Investment
Political Geography:
Russia, Iran, Central Asia, Kazakhstan, and Caspian Sea

185. Social Accountability and Public Service Delivery in Rural Africa

Author:
Esbern Friis-Hansen
Publication Date:
01-2014
Content Type:
Policy Brief
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
Social accountability as a tool for development planning is gaining foothold in international donor circles. It is concerned with the responsibility and responsiveness of state authorities, as well as the ability of citizens to make claims and hold those who exercise power to account for their actions.
Topic:
Development, Economics, Foreign Aid, and Foreign Direct Investment
Political Geography:
Africa

186. Investment Treaties and Industrial Policy: Select Case Studies on State Liability for Efforts to Encourage, Shape and Regulate Economic Activities in Extractive Industries and Infrastructure

Author:
Lise Johnson
Publication Date:
02-2014
Content Type:
Special Report
Institution:
Columbia Center on Sustainable Investment
Abstract:
This paper, prepared in connection with a February 2014 conference organized by the UN Economic Commission for Africa, discusses some of the implications that investment treaties have for investments in infrastructure and the extractive industries. It focuses on liability for government conduct (1) in connection with tenders and negotiations; (2) when responding to questions regarding the legality of the investment; (3) in using performance requirements to leverage benefits and capture spillovers from the investment; (4) changing the legal framework governing an investment in response to evolving needs, circumstances, and interests; (5) administering the investment; and (6) requesting, and responding to requests for, renegotiation. After describing some investment treaty disputes, this paper concludes by outlining options for addressing and minimizing tensions between investment treaties and government policies and practices in these areas.
Topic:
International Political Economy and Foreign Direct Investment
Political Geography:
Global Focus

187. Regional Integration In Africa: Some Recent Developments And Challenges

Author:
Idris Ademuyiwa and Eberechukwu Uneze
Publication Date:
10-2014
Content Type:
Working Paper
Institution:
Centre for the Study of the Economies of Africa (CSEA)
Abstract:
African countries have been left out of the recent benefits accruing from international trade. For example, they accounted for only 3.2 percent of world trade in 2013 compared to 5 percent in the mid-1960s. Regional integration can reverse this weak performance as it holds the promise for countries to gain from the resultant economies of scale and enhanced competitiveness. It will also help to expand the markets for foreign direct investment.
Topic:
International Trade and Finance, Foreign Direct Investment, Regional Integration, Trade, and Trade Policy
Political Geography:
Africa and Latin America

188. Special Economic Zones - 20 years later

Author:
Camilla Jensen
Publication Date:
02-2014
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
In this paper the authors undertake an ex-post evaluation of whether the special economic zones (SEZs) introduced in Poland in 1994 have been successful in meeting regional development objectives. They evaluate the policy of as many of its objectives as possible: employment creation, business creation (which includes attracting foreign direct investment), income or wage effects, and environmental sustainability. They use different panel data methods to investigate this question at the powiat and gmina levels in Poland during the 1995-2011 period. It is also possible to include numerous controls to reduce the problem of the omitted variables bias such as education level, dependency rates, state ownership, general subsidies and whether the area is urban or rural. The results indicate that SEZs in Poland have been successful in a number of their objectives such as private business creation. The positive effect of the policy however mainly comes through foreign direct investment (FDI), whereas the effects on e.g. investment and employment are small or insignificant. In other areas, such as securing higher income levels and locking firms into the sustainability agenda through the adoption of green technologies and reduced air pollution, the authors find only a small positively moderating effect of the policy on what are traditionally economically disadvantaged areas in Poland that used to be dependent on the socialist production model. Hence, despite high levels of FDI, the zones policy has not managed to overcome the legacy of backwardness or lagging regions. The main policy implication of the paper is that SEZs may be successful in stimulating activity in the short run but the policy must be seen as one of necessary temporality and can therefore not stand alone. Before launching SEZs, policymakers must have plans in place for follow up measures to ensure the longer term competitiveness and sustainability implications of such an initiative. There is a need to understand the connection between the specific incentive schemes used (in this particular case tax incentives were used) and the kinds of firms and activities they attract, including the behavioral models that those incentives promote.
Topic:
Foreign Direct Investment, Special Economic Zones, and Macroeconomics
Political Geography:
Europe and Poland

189. Toward a multilateral framework for investment

Author:
Nicolle Graugnard
Publication Date:
09-2013
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Business needs a stable and predictable investment environment, especially in times of economic uncertainty, to continue to generate employment and create wealth. Although foreign direct investment (FDI) flows rose for two years after plummeting in the wake of the global financial crisis, they fell again by 18% to US$ 1.4 trillion in 2012. According to UNCTAD, the major factors contributing to this sharp decline were economic fragility and policy uncertainty in several economies. Moreover, investment regulations classified as “restrictive” rose to 25% in 2012, compared to just 6% in 2000; “liberalizing” regulations were 75 % of the total in 2012, compared to 94% in 2000. The result of these regulations is, therefore, not surprising: businesses are holding back on new investments, with multinational enterprises reporting record cash-holdings of between US$ 4 to 5 trillion.
Topic:
Development, Economics, International Cooperation, International Trade and Finance, Foreign Direct Investment, and Governance

190. The futile debate over a multilateral framework for investment

Author:
Axel Berger
Publication Date:
08-2013
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
One of the recurrent debates on international investment rule-making relates to the question whether it is possible to establish a multilateral framework for investment (MFI). Proponents argue that growing foreign direct investment (FDI) from emerging countries, especially China, contributes to a new consensus on global investment rules.
Topic:
Economics, Globalization, International Trade and Finance, Regional Cooperation, and Foreign Direct Investment
Political Geography:
China

191. The need for an international investment consensus-building process

Author:
Karl P. Sauvant and Federico Ortino.
Publication Date:
08-2013
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Discussions on a multilateral investment framework have recently seen a revival, as the International Chamber of Commerce, the World Economic Forum and various authors have called for negotiations on this subject. A growing number of countries have been reviewing and adapting their international investment policies. This reflects dissatisfaction with the current international investment law regime, and a desire to improve it.
Topic:
Economics, International Law, International Trade and Finance, and Foreign Direct Investment

192. Cost allocation in investment arbitration: Back toward diversification

Author:
Baiju S. Vasani and Anastasiya Ugale
Publication Date:
07-2013
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
In 2006, the Thunderbird tribunal, operating under the UNCITRAL Arbitration Rules, called for the harmonization of cost-allocation approaches in commercial and investment arbitration. Subsequent tribunals appear to be heeding Thunderbird's call paving a trend in favor of the so-called “costs follow the event” (CFtE) approach and its variations. Generally, this approach prescribes the shifting of arbitral costs and reasonable legal fees to the unsuccessful party (or based on parties' relative success) and has historically been prevalent in commercial arbitration. By contrast, the more traditional approach in investment arbitration has been to share the costs of arbitration equally, save for special circumstances, with each party covering its own legal fees (traditional approach). In the wake of what appears to be an emerging trend in favor of a default CFtE custom, it is time to revisit the idea of whet her a single harmonized approach to cost allocation is really appropriate. We suggest that it most likely is not.
Topic:
Development, Economics, Emerging Markets, International Trade and Finance, and Foreign Direct Investment

193. Revisiting the Quality of Agricultural Official Development Assistance

Author:
Kimberly Ann Elliott and Edward Collins
Publication Date:
09-2013
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
The Quality of Official Development Assistance (QuODA) measures how well donors score on the dimensions of aid quality that evidence and experience suggest lead to effective aid. Those dimensions are maximizing efficiency, fostering institutions (in recipient countries), reducing burden (for recipient governments), and transparency and learning (on the part of donors). The Quality of Agricultural Official Development Assistance (Ag QuODA), as much as possible, applies the original QuODA methodology to donors giving agricultural aid. In this update of Ag QuODA, we use new data from the Creditor Reporting System to extend our earlier analysis and update it to 2011. We also examine data on aid activities that the Bill and Melinda Gates Foundation is now reporting. We find that the quality of official development assistance (ODA) varies widely, with multilateral donors generally doing better on average than bilateral donors. Improvements in the data quality and availability are making sector-specific assessments like Ag QuODA more feasible, but further improvements are needed to allow a deeper understanding of aid effectiveness.
Topic:
Agriculture, Development, Economics, Foreign Aid, and Foreign Direct Investment

194. Changing Financial Flows During Afghanistan's Transition: The Political Economy Fallout

Author:
William A. Byrd
Publication Date:
09-2013
Content Type:
Policy Brief
Institution:
United States Institute of Peace
Abstract:
Massive amounts of money flowing into Afghanistan since 2001 (foreign military spending, aid, domestic revenues, opium profits, land takeovers and development, informal mineral exploitation, theft of funds such as at Kabul Bank) have had profound political economy impacts, not least by further entrenching factionalized politics and fragmented patronage networks. The ongoing transition involving the drawdown of international troops and Afghan takeover of security responsibilities will be accompanied by drastic declines in international military expenditures and aid. Total resources for patronage will fall sharply; the Afghan government's share in remaining funds will increase; declines will be greatest at local levels, especially in insecure areas in the south/east which had heavy international military presence and high aid; and drug money will become increasingly important. At lower levels of patronage, competition over declining resources may intensify, so even in the absence of major armed conflict at the national level, localized conflicts may continue and even proliferate, aggravated by taking revenge and “settling accounts” by currently excluded and marginalized groups.
Topic:
Arms Control and Proliferation, Development, Economics, Islam, Foreign Aid, Narcotics Trafficking, and Foreign Direct Investment
Political Geography:
Afghanistan and Central Asia

195. Progress on Sovereign Wealth Fund Transparency and Accountability: An Updated SWF Scoreboard

Author:
Edwin M. Truman and Allie E. Bagnall
Publication Date:
08-2013
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
The term sovereign wealth fund (SWF) had not been coined a decade ago. By 2007, economists and the financial world were alternatively excited about or alarmed by the growing influence of these institutions, though in fact many of them had been around for decades. Politicians in countries in which the funds invested generally welcomed the additional financial resources from abroad while expressing concern about the motivations of investors and what they feared could be threats to political, economic, and financial security. The general public in the countries in which the funds were based realized at the same time that political leaders were investing large amounts of national wealth at home and abroad with limited disclosure, and they wanted to know more.
Topic:
Economics, Globalization, International Trade and Finance, Foreign Direct Investment, and Sovereign Wealth Funds

196. Are trade-law inspired investment rules desirable?

Author:
Marino Baldi
Publication Date:
09-2013
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Traditional bilateral investment treaties (BITs) focus on investment protection, i.e., regulate post-establishment aspects of foreign investment. In recent times, investment agreements have increasingly been supplemented with liberalization rules and also clauses on, e.g., key personnel, labor rights and sustainable development. Such integrated investment accords have notably become part of preferential trade agreements (PTAs). This trend started with NAFTA, continued with the negotiations on a Multilateral Agreement on Investment (MAI), and has in the course of the past ten years increasingly characterized PTAs throughout the world. The rapid proliferation of PTAs has, in the investment field, unfortunately led to lower quality provisions. Many of these treaties contain such wide-ranging exceptions and vaguely formulated safeguard clauses that their regulatory value as regards the protection of foreign investments in their post-establishment phase is called into question.
Topic:
Development, Economics, International Trade and Finance, and Foreign Direct Investment

197. The Rebirth of Education: Why Schooling in Developing Countries Is Flailing; How the Developed World Is Complicit; and What to Do Next

Author:
Lant Pritchett
Publication Date:
09-2013
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
More than a billion children worldwide—95 percent—are in school. That's due in part to steady progress toward the second Millennium Development Goal that every child “be able to complete a full course of primary school” by 2015. To put that in perspective, the average adult in the developing world today receives more schooling than the average adult in advanced countries did in 1960. Schooling, however, is not the same as education. Few of these billion students will receive an education that adequately equips them for their future. The poor quality of education worldwide constitutes a learning crisis; donors and development agencies have been complicit in its creation, but they can and should be part of the solution, not by prescribing changes, but by fostering environments where change is possible.
Topic:
Demographics, Development, Economics, Education, Foreign Aid, and Foreign Direct Investment

198. Toward a New Paradigm of Sustainable Development: Lessons from the Partnership for Growth

Author:
Jeri Jensen
Publication Date:
09-2013
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
The Obama administration has the opportunity to achieve more sustainable development solutions with a new model of development relevant in a world where private investment is the primary driver of economic growth.
Topic:
Development, Economics, International Trade and Finance, Markets, Foreign Aid, and Foreign Direct Investment
Political Geography:
United States

199. Growth and Opportunity: The Landscape of Organizations that Support Small and Growing Businesses in the Developing World

Author:
Monitor Deloitte
Publication Date:
09-2013
Content Type:
Working Paper
Institution:
Aspen Institute
Abstract:
Over the next decade some 600 million new jobs will be needed to reverse the effects of the global financial crisis and avoid a further increase in unemployment. Small and growing businesses (SGBs) are a critical growth engine capable of creating many of these jobs Not only do SGBs create a large number of jobs—200 on average—but those jobs tend to be higher paying. One study showed that companies with 10–50 employees offer wage premiums of 10-30% over micro-enterprises with less than 10 employees, while the premium increases to 20-50% if the business has more than 50 employees. In short, creating new jobs is a critical component to improving livelihoods in the developing world, and SGBs are an important tool for driving this job creation, as well as producing other positive social and environmental returns for their communities by producing goods and services (health, education, sanitation, etc.) for the world's poorest.
Topic:
Development, Economics, International Trade and Finance, Markets, Political Economy, Foreign Aid, and Foreign Direct Investment

200. Obama's Asia Pivot and the Koreas

Author:
Richard Weitz
Publication Date:
11-2013
Content Type:
Journal Article
Journal:
International Journal of Korean Studies
Institution:
International Council on Korean Studies
Abstract:
The end of President Barack Obama's first term provides an opportunity to assess what the administration's "strategic rebalancing" toward and within the Asia-Pacific region (sometimes called the "Asian Pivot" or "Back to Asia" policy) has accomplished as well as what challenges and unmet opportunities remain. The administration has launched several successful multinational diplomatic initiatives in the region to supplement U.S. bilateral ties with key Asian partners; relations with ASEAN have clearly improved. The economic dimension of the Pivot has made progress as seen by the growth of support for the Trans-Pacific Partnership. U.S. efforts to promote democracy and human rights in Asia have proved far less successful, except perhaps for Myanmar, where the political transition remains a work in progress. The U.S. military has managed to establish a broader presence in the region, especially in Australia and Southeast Asia. U.S. officials have sought to impart new energy into the five existing formal U.S. bilateral defense alliances in Asia--with Australia, Japan, the Philippines, Thailand, and South Korea. But the main problem with the pivot has been the inability to overcome Chinese anxiety about U.S. rebalancing, which has complicated their cooperation over North Korea and other issues. Fortunately, relations between the United States and South Korea are also strong. The ROK is becoming an important U.S. partner in several dimensions of the Pivot, though ROK-U.S. differences over North Korea might emerge with the advent of a new government in Seoul.
Topic:
International Trade and Finance and Foreign Direct Investment
Political Geography:
Japan, China, Asia, Australia, and Thailand