For foreign investment, governments need organizational capabilities that go beyond Adam Smith’s maxim that they must do no more than ensure “peace, easy taxes, and a tolerable administration of justice.” They need to do at least three additional things.
CAMBRIDGE – The scenario is all too familiar. A reformist government wants to boost economic growth and employment by implementing market-friendly reforms designed to make the country more attractive to (often foreign) investors. Policymakers understand that these investors possess the technological prowess, organizational capability, and market reach that the country desperately needs. Committees are created to improve the country’s performance in the World Bank’s DoingRead More »