Foreign Direct Investment and Poverty Reduction
Foreign direct investment is a key ingredient of successful economic growth and development in developing countries--partly because the very essence of economic development is the rapid and efficient transfer and cross-border adoption of "best...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2001/06/1346346/foreign-direct-investment-poverty-reduction http://hdl.handle.net/10986/19600 |
| Summary: | Foreign direct investment is a key
ingredient of successful economic growth and development in
developing countries--partly because the very essence of
economic development is the rapid and efficient transfer and
cross-border adoption of "best practices." Foreign
direct investment is especially well suited to effecting
this transfer and translating it into broad-based growth,
not least by upgrading human capital. Growth is the single
most important factor in poverty reduction, so foreign
direct investment is also central to achieving that
important World Bank goal. Government-led programs that
improve social safety nets and explicitly redistribute
assets and income might direct more of the fruits of growth
to the poor. But these are complements--not alternatives--to
sensible growth-oriented policies. And growth is needed to
fund these government-led programs. Moreover, the delivery
of social services to the poor--from insurance schemes to
such basic services as water and energy--can clearly benefit
from reliance on foreign investors. In short, foreign direct
investment remains one of the most effective tools in the
fight against poverty. |
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