Occasional Paper Series

Book 11

Clarifying the Construct of Consumer Involvement

Order Effect in Questionnaires

Organization Development and Change

Attracting Foreign Direct Investment into Infrastructure

by Foreign Investment Advisory Service

Published 30 November 1999

During the early 1990s, the Foreign Investment Advisory Service (FIAS), a joint facility of the World Bank and the International Finance Corporation (IFC), found that governments and foreign investors alike were concerned and frustrated about difficulties in successfully implementing private infrastructure projects. Governments were trying to attract these new types of investment without having established an appropriate policy framework. Therefore, there were no institutional structures to resolve impediments effectively and provide clear guidelines for the award of such large-scale projects. Legal frameworks tended to address traditional public-sector responsibilities and not investor concerns. Regulatory environments either did not exist or did not provide investors enough guarantees that their future operating environment would be sufficiently reliable. Consequently, FIAS has been advising many governments in the developing world on the best way to establish a policy framework attractive to foreign investors. FIAS typically combines its review of the institutional, legal and regulatory environment with investor roundtables and workshops for senior government officials to ensure that all the major concerns of both the government and the private sector are taken into account. Although each country has unique policy problems, FIAS has encountered common features in key areas that pose stumbling blocks for private infrastructure investments. This study synthesizes this experience and derives lessons for facilitating and encouraging foreign direct investment in infrastructure.

Using Tax Incentives to Compete for Foreign Investment

by Louis T. Wells, etc., and Foreign Investment Advisory Service

Published 31 October 2001

This volume consists of two essays both on the use of tax incentives to attract foreign direct investment. The first essay examines this issue in the context of Indonesia. The authors of this essay contend that tax incentives for foreign investors are not part of the solution but may actually be counterproductive. The second essay in this volume provides a review of earlier literature pertaining to the same issues discussed in the first essay.