inostrani kapital kao faktor razvoja zemalja - Ekonomski fakultet u ...

To sum up the present discussion, and ranking the foreign supply of capital in
terms of liquidity from debts, to portfolio investments, to FDI, a government
should carefully set up the mix and the timing of liberalization policies. It should
first define a realistic target for growth and then proceed on the base of a thorough
examination of the local condition of its industries and services. To do so, a State,
and its bureaucracy, needs to be credible, accountable and stable. When citizens
need to make sacrifices, States must also set up an area of social exchange between
what is required to reach that target, and what will be later on available in terms of
better standards of living. We shall return to this question in Section 3.
2. Investments and institutions
In general, countries with better public institutions are more likely to attract a
higher share of FDI, relative to other forms of capital inflows (especially bank
loans) (Wei and Wu, 2002). Considering that FDI do not present most of the above
mentioned drawbacks of foreign debts and portfolio investments, and also that FDI
are said to bring about a lot of collateral benefits for growth - an issue to which we
shall soon return - two questions emerge. First, what kind of institutional building
needs to be generated. Second, what kind of State is more likely to succeed, if one
wants to gear FDI into economic development and avoid a foreign exploitation of
national resources, with no benefit for the country. Let’s concentrate on the first
question here. In Section 3 we shall discuss the second one.
Current literature distinguishes between two classes of institutions: 1)
property right institutions, as proxied by control over corruption, risk of
expropriation, juridical independence and governance transparency; 2) financial
institutions, represented by various measures of stock-market and banking sector
development, credit worthiness and credit risk rating, plus other measures of
macroeconomic discipline. Weaker institutions in both areas are expected to
strongly reduce the share of FDI to total liabilities. So, provided that a certain
‘institutional building’ is put in place, additional measures have been suggested,
across the board, to attract FDI in transition economies. The reasons are
straightforward and all based on the presence of externalities and spill-over effect
of FDI into the recipient economy. If the technology and the knowledge associated
with them can be considered, at least to some extent, as a ‘public good’ (i.e.
appropriated by others with negligible additional costs), host countries and local
firms can benefit from FDI in many cases, even if multinational enterprises (MNE)
carry on their operations with fully owned affiliates. This happens, for example,
when MNE:
1. contribute to the overall efficiency of the industrial system by overcoming
supply bottlenecks: a feature that is destined to diminish with time, as the
technology of the host country develops by imitation and amelioration;
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