My Brother’s Keeper or Reaper? Justification and Effectiveness of FDI in Development

Abstract

In debating whether FDI (foreign direct investment) is useful for a country's development, proponents of a retreat from international assistance overlook issues of unequal power and the powerful grip that industrialized nations retain on poor countries, whether through colonialism and neo-colonialism, unequal trade, and the destabilization of governments of poor countries by foreign powers. Through these measurements, resources and wealth flows from the poorer countries to the richer countries at an unfair, usually much lower, price. Thus, FDI would be proven useful. Moreover,  the effects of FDI extend far beyond improving the economy of a nation, but also extend the living standard and decrease the social inequality of the receiver countries.