What Are the Costs?

Donors finance and support a surprising amount of instruments that promote foreign direct investment (FDI) in developing countries. This paper assesses how FDI promotion instruments operated by the OECD, the World Bank, UNIDO and UNCTAD contribute to economic and social development and environmental sustainability. Given the lack of cost-benefit analysis and evaluations at present, the aim of this paper is to stimulate the debate on the impact, costs, benefits and aid effectiveness of investment promotion instruments, specifically in the context of the UN Conference on Financing for Development and in other forums such as the OECD and UNCTAD.

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