Indra de Soysa: Foreign Direct Investment, Democracy and Development: Assessing Contours, Correlates and Concomitants of Globalization. London: Routledge 2003

Under the title “Foreign Direct Investment, Democracy and Development: Assessing contours, correlates and concomitants of globalization”, ZEF-researcher Indra de Soysa published a profound analysis of the effects of globalization on economy and society published by Routledge in London today, April 28.

De Soysa brings an empirical perspective to the highly contested subject of the effects of globalization on economy and society. Using quantitative data, this book addresses the shape and degree of internationalisation by focussing on the impact of Foreign Direct Investment (FDI) and democracy on economic development and the effect of economic internationalisation on democracy. The author examines democracy’s effects on economic growth and considers the claim that foreign capital has a detrimental effect on democracy to show that FDI in fact can play a supporting role for democracy and creates higher growth rates than domestic capital. From these results the author suggests that policy makers should seek to encourage globalization by ensuring open access to products from poorer countries, encouraging private investment within poorer countries and that such countries should concentrate on building up human and institutional capital to attract investment.

After setting a theoretical framework for the globalization and development debate in the first chapter, the author digs into an empirical data based analysis and presents his results of new analysis in the second part. Based on this theory and facts, in the third chapter de Soysa examines the correlation between democracy and economic growth, while the fifth chapter is dedicated to the empirics of democracy and growth. In its final conclusive chapter, globalization’s implications, correlates and concomitants are assessed.

Author: Indra de Soysa was Senior Research Fellow at the Center for Development Research at ZEF and leaded the Research group on "Democracy, Rule of Law and Governance"