Should South Africa have an FDI policy? : a critical analysis of South Africa's current policy stance
Date
1998
Authors
Cohen, Richard
Journal Title
Journal ISSN
Volume Title
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Abstract
The purpose of this paper is to provide a critical assessment of the Foreign Direct
Investment (FDI) policy stance in South Africa. We analyse whether investment
incentives will be effective in increasing FOI inflows and look at the importance of the
behaviour of transnational corporations (TNCs) in determining the impact of FDI on the
host. This analysis allows us to determine the appropriate objective of FDI policy,
namely channelling TNC behaviour' such that they generate the desired benefits for the
host-This raises the question of how such behaviour may be channelled in practice.
Using the framework of information economics, we identify the nature of the difficulties
with which policy makers must deal in designing behavioural incentives. Although this
does not lead us directly to policy prescriptions, when augmented with practical
considerations, it provides us with a basis for analysing whether FDI policy (as distinct
from industrial policy) is called for by isolating one instance in which a differentiated
approach. would be likely to increase the efficacy of policy, we show that there is good
reason to suspect that the absence of a distinct FDI policy in South Africa may be suboptimal.
Description
A Dissertation Submitted to the Faculty of Commerce University of the Witwatersrand
for the Degree of Master of Commerce
Keywords
Investments, Foreign -- South Africa.
Citation
Cohen, Richard (1998) Should South Africa have an FDI policy? : a critical analysis of South Africa's current policy stance, University of the Witwatersrand, Johannesburg, <http://hdl.handle.net/10539/22847>