Investment Climate for Who?

The improvement of “the” investment climate has become a major strategic focus of western advice to developing countries. I will take the World Bank’s recommendations to be representative of this advice. However, we might “complicate” the discussion by recognizing that there are tradeoffs between different groups with different capabilities, interests, and assets.  Making the investment climate better for one group may well be at the cost of making it worse for another group.  Western advisors, e.g., from the World Bank or IMF, tend to ignore these tradeoffs and to implicitly identify with one group (usually external or foreign investors) and then to count an improvement in the investment climate for that group as being an “improvement” per se.

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