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Foreign direct investment and development: An historical perspective

Working papers

Written by Dirk Willem te Velde

The role of investment, especially foreign direct investment (FDI), in driving economic growth and development has been a contested one ever since the UN development decade of the 1960s. There have always been views in favour of FDI and against it. Some argue that FDI leads to economic growth and productivity increases in the economy as a whole and hence contributes to differences in economic growth and development performances across countries, but others stress the risk of FDI destroying local capabilities and extracting natural resources without adequately compensating poor countries. This background paper for UN World Economic and Social Survey examines trends in the relationship between FDI and development in an historical context.

Dirk Willem te Velde