The Institutional Reforms Debate and FDI Flows to the MENA Region: The " Best" Ensemble

Wasseem Michel Mina

doi:10.1016/j.worlddev.2012.04.026

The Institutional Reforms Debate and FDI Flows to the MENA Region: The " Best" Ensemble

Wasseem Michel Mina

Research output: Contribution to journal › Article › peer-review

42 Citations (Scopus)

Abstract

This paper empirically examines the theoretical debate on the adoption of a best approach to reforming institutions identified by Rodrik (2008) in the context of property rights protection and FDI flows to eight MENA countries. The first best approach comprises strengthening domestic institutional functions only, while the second best comprises in addition entering into force bilateral investment treaties and the interaction between functions and treaties. Empirically both approaches to reducing investment expropriation risk encourage FDI flows. The positive effect of the second best approach depends on the success of the first best approach, suggesting the two approaches are complementary.

Original language	English
Pages (from-to)	1798-1809
Number of pages	12
Journal	World Development
Volume	40
Issue number	9
DOIs	https://doi.org/10.1016/j.worlddev.2012.04.026
Publication status	Published - Sept 2012

Keywords

FDI
First best
Institutional reforms
MENA
Property rights protection
Second best

ASJC Scopus subject areas

Geography, Planning and Development
Development
Sociology and Political Science
Economics and Econometrics

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10.1016/j.worlddev.2012.04.026

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abstract = "This paper empirically examines the theoretical debate on the adoption of a best approach to reforming institutions identified by Rodrik (2008) in the context of property rights protection and FDI flows to eight MENA countries. The first best approach comprises strengthening domestic institutional functions only, while the second best comprises in addition entering into force bilateral investment treaties and the interaction between functions and treaties. Empirically both approaches to reducing investment expropriation risk encourage FDI flows. The positive effect of the second best approach depends on the success of the first best approach, suggesting the two approaches are complementary.",

keywords = "FDI, First best, Institutional reforms, MENA, Property rights protection, Second best",

author = "Mina, \{Wasseem Michel\}",

note = "Funding Information: The author would like to thank three anonymous reviewers, Paul Alagidede, Luc Christiaensen, Alisa DiCaprio, Suut Dogruel, Imed Drine, Augustin Fosu, Abdulnasser Hatemi, Magda Kandil, Jorge Martinez-Vazquez, Wim Naude, Jeffrey Nugent, Aleksander Surdej, and participants at the Nordic Conference on Development Economics (2010), the African Econometric Society{\textquoteright}s 15th Annual Conference on Econometric Modeling for Africa (2010), the Third Summer Research Day of the Faculty of Business and Economics at the United Arab Emirates University (2010), and the Middle East Economic Association Meetings (2011) for useful comments and suggestions. The author would also like to thank Lay Poh Allonen and Ahmed Taha for excellent library services. Part of this research was conducted while the author was a UNU-WIDER visiting scholar in summer 2009. The financial support of the Faculty of Business and Economics at the United Arab Emirates University (through Summer Research Grant Program) is gratefully acknowledged. ",

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AB - This paper empirically examines the theoretical debate on the adoption of a best approach to reforming institutions identified by Rodrik (2008) in the context of property rights protection and FDI flows to eight MENA countries. The first best approach comprises strengthening domestic institutional functions only, while the second best comprises in addition entering into force bilateral investment treaties and the interaction between functions and treaties. Empirically both approaches to reducing investment expropriation risk encourage FDI flows. The positive effect of the second best approach depends on the success of the first best approach, suggesting the two approaches are complementary.

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KW - Institutional reforms

KW - MENA

KW - Property rights protection

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The Institutional Reforms Debate and FDI Flows to the MENA Region: The " Best" Ensemble

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Keywords

ASJC Scopus subject areas

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