Europe

by Alexis Lozada

Along with international trade and financial flows, an explosive growth of foreign direct investment (FDI) has characterized the process of globalization occurring since the late twentieth century. Although most of the FDI goes to the developed economies, many books have been written about the effects of FDI on developing countries. Findings have ranged from the favorable macroeconomic effects of FDI on the balance of payments, to FDI‘s crowding-out effects on domestic financial markets and its pernicious results in the development of local economies. Historical evidence has also shown that FDI does not often contribute to sustainable long-term economic development in the developing world. Eva Paus’ book, Foreign Direct Investment, Development, and Globalization: Can Costa Rica become Ireland?, adds to the discussion of the effects of FDI in developing countries by introducing an in-depth empirical and comparative economic analysis of Ireland and Costa Rica. Both Ireland and Costa Rica are “latecomers in the development process” and have received little attention in the academic development literature.

Published In: Volume 3, Issue 1: Globalization and its Implications — March 15, 2006