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Legal Systems as a Determinant of FDI : Lessons from Sri Lanka :  Lessons from Sri Lanka - Amanda Perry

Legal Systems as a Determinant of FDI : Lessons from Sri Lanka

Lessons from Sri Lanka

Hardcover Published: August 2001
ISBN: 9789041198532
Number Of Pages: 240

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Amanda Perry poses a formidable challenge to the current consensus on the best way to reform legal systems in order to attract and support foreign direct investment (FDI) in developing countries. Using detailed examples from Sri Lanka, she shows that the 'ideal paradigm' approach to legal reform espoused by multilateral development organisations and bilateral aid donors is not only fundamentally flawed, but misconceived for reasons that we may not fully understand. She recommends a shift in emphasis from the 'global' legal reform agenda to a country-specific approach, based on a rigorous formulation of the common ground where the expectations of investors and the countries in question meet.The crux of this 'ideal paradigm' approach resides in the generally accepted belief that a Western-style market-oriented, rule-bound legal system is the sine qua non of successfully attracting and supporting FDI. However, through a wide-ranging survey of Sri Lankan and foreign business people, lawyers, non-legal advisers, NGO workers, diplomats, development workers, and government officials, Perry shows that this is far from the case. Investors are generally insensitive to the nature of the host state legal system when making the decision to invest, and their perceptions and expectations of the host state legal system may be significantly affected by such factors as their nationality, export orientation and size. Perry suggests that the conclusions drawn from this detailed analysis from Sri Lanka, applied on a global scale, have the potential to greatly improve the quality of many developing countries' participation in the world economy.

List of Abbreviations
List of Tables
List of Figures
List of Charts
Acknowledgements
Introduction: Objectives, Importance and Method of the Research
Selection of Case Studyp. 2
Overview of Research Methodsp. 3
Interviewsp. 4
Questionnairep. 4
Research Problemsp. 7
Structure of the Studyp. 9
Review of Theoretical Positions on Legal Systems as a Determinant of FDI
The Determinants of FDIp. 13
Definition of Termsp. 13
Host States and FDIp. 14
Investors and the Determinants of FDIp. 16
Legal Systems as a Factor in Investment Decisionsp. 23
Definition of Termsp. 24
Empirical Evidence of Legal Systems as a Determinant of FDIp. 24
International Co-ordination of the Treatment of FDIp. 28
Studies of the Relationship Between Law and Economic Decisionsp. 30
Evidence that Legal Systems Might not be a Factor in FDIp. 37
An Ideal Institutional Paradigm for FDI?p. 47
Classification of Legal Systemsp. 47
The Quest for an Ideal Institutional Paradigmp. 49
Transaction Costs and the Ideal Paradigmp. 55
Problematising the Paradigmp. 65
Case Study of Sri Lanka
Foreign Investment in Sri Lankap. 77
The Sri Lankan Economy and Investment Climatep. 77
Profile of Investmentsp. 79
The Legal Framework for FDIp. 80
Remaining Obstacles to FDI and Agenda for Legal Reformp. 82
The Legal System as a Factor in the Decision-making Process of Foreign Investorsp. 85
General Observations of Intervieweesp. 85
Pre-investment Investigationsp. 86
Investing in Hindsight of the Legal Systemp. 93
The Ideal Paradigm and Attracting FDI to Sri Lankap. 97
General Observations from Interviews and Secondary Sourcesp. 97
Perceptions of the Sri Lankan Legal Systemp. 98
Measuring the Sri Lankan Legal System against the Ideal Paradigmp. 122
Reactions to the Sri Lankan Legal Systemp. 124
Reactions to a Hypothetical Legal System not of the Ideal Paradigmp. 126
A Class of Non-conforming Investors?p. 134
Summary of Findings and Initial Implications for Legal Reformp. 134
The Possible Role of Investor and Investment Characteristicsp. 139
Nationality of Foreign Investorsp. 141
Intended Duration of the Investmentp. 144
Size of the Investmentp. 145
Export-orientation and Locationp. 151
Existence of a Local Partnerp. 154
Proportion of Equity held by Foreignersp. 155
Age of the Investmentp. 156
Companies with no Foreign Managementp. 157
Summary of Findingsp. 158
Reappraisal of Theory and Conclusions
Contrasting Theory with Realityp. 161
Reasons for the Disparity between Theory and Realityp. 164
Issues for Future Researchp. 171
Implications for Sri Lanka and Other Host Statesp. 175
Bibliographyp. 179
Questions Around which Interviews were Conductedp. 193
App. 2: Questionnairep. 195
Ratings Allocated to Questionnaire Responsesp. 199
Intervieweesp. 201
Characteristics of Respondent Companiesp. 203
'Non-Responses' to Questionnairep. 205
Indexp. 207
Table of Contents provided by Blackwell. All Rights Reserved.

ISBN: 9789041198532
ISBN-10: 9041198539
Series: International Economic Development Law
Audience: Professional
Format: Hardcover
Language: English
Number Of Pages: 240
Published: August 2001
Country of Publication: NL
Dimensions (cm): 23.39 x 15.6  x 1.42
Weight (kg): 0.51