Rethinking Investment Incentives: Trends and Policy Options
The use of incentives to attract investment is connected to and impacts the most pressing challenges facing us today, including climate change, corruption, employment, development, harmful competition, and public spending efficiency. How, when, where, and why governments use incentives to attract investment is therefore critically important to whether and how society benefits from investments and to other public policy decisions and trade-offs. It is increasingly apparent, however, that the use of incentives is not well understood – including by the policy makers who use them – which necessitates a closer look and, in many cases, a policy response.
In that context, this book explores the use of incentives by governments worldwide, illustrating current trends relating to a diverse range of incentives. It also discusses current and possible future efforts at the sub-national, national, and international level to address the policy and governance challenges that are both driving, and driven by, the use of incentives. By linking economic analysis, development impacts, regulatory issues and policy options, this book is a key resource for understanding what the increasing mobility of capital means for the cities, states, nations and regions that seek to attract, direct, and retain investments.
As an overall conclusion, this volume suggests that careful investment policies are particularly crucial to guide the strategic and efficient mobilization of public and private resources for improved economic, social and environmental outcomes. Investment incentives may play a useful role, if they are strategically and thoughtfully designed and are based on a robust cost-benefit analysis.
Economics | International Economics | Law | Law and Economics | Law and Politics | Political Economy | Political Science | Political Theory | Social and Behavioral Sciences | Taxation-Transnational
Columbia University Press
New York, NU
"What are the costs and benefits of the incentives used to attract new foreign investment? How can governments maximize the positive impact of available capital? Rethinking Investment Incentives addresses these and other important questions in national foreign direct investment policy. This volume will be of great value to anyone seeking to explore the complicated set of issues surrounding contemporary investment incentives."
—Karl Sauvant, Columbia University
"In today's world, increasingly mobile multinational enterprises (MNEs) and immobile locations are locked in a co-evolutionary embrace. They need each other in the manner of bees and flowers. The benefits to locations from MNE knowledge spillovers create powerful arguments for government investment incentives. Hence I welcome this volume, edited as it is by four experts who collectively have many decades of relevant experience. They have assembled an enviable team of specialists who examine investment incentives from all the important perspectives – theory, practice and policy. I highly recommend this volume to scholars as well as policymakers."
—Ram Mudambi, Temple University
"This is an important, well-organized book that is essential reading for leaders of countries and their decision making staff, on trade and other related matters, if they are to survive and thrive in our increasingly competitive, globalized world."
Tavares-Lehmann, Ana Teresa; Toledano, Perrine; Johnson, Lise; and Sachs, Lisa E., "Rethinking Investment Incentives: Trends and Policy Options" (2016). Columbia Center on Sustainable Investment Books. 4.