Rethinking Foreign Investment for Sustainable Development
Lessons from Latin America
Edited by Kevin P. Gallagher and Daniel Chudnovsky
with a Foreword by José Antonio Ocampo
Anthem Press, 2010
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A series of essays critiquing foreign direct investment in Latin America.
Analyzes the Latin American backlash against “Washington Consensus” policies.
Draws lessons from Latin America that can be applied to foreign direct investment more generally.
After almost twenty-five years of experimenting with the neo-liberal economic reforms collectively known as “Washington Consensus” policies, Latin Americans are starting to re-assess the merits of these policies – at the voting booth. Many newly elected governments are beginning to scrutinize the role of foreign direct investment (FDI) in particular, and some nations have gone so far as to nationalize foreign firms. Without endorsing or condoning the actions taken by these governments, this volume demonstrates that it is quite rational for governments in the region to re-evaluate the role of FDI for their development paths. The great promise of FDI by multinational corporations is that capital will flow into your country and be a source of dynamic growth. Beyond boosting income and employment, the hope was that manufacturing FDI would bring knowledge spillovers that would build the skill and technological capacities of local firms, catalyzing broad-based economic growth; and environmental spillovers that would mitigate the domestic ecological impacts of industrial transformation. Consisting of country case studies and comparative analyses from Latin American and U.S.-based political economists, this volume finds that when FDI did materialize if often fell far short of generating the necessary linkages required to make FDI work for sustainable economic development.
Foreword by José Antonio Ocampo
1. FDI and Sustainable Development in the Americas
Kevin P. Gallagher, Daniel Chudnovsky and Roberto Porzecanski
2. Is Foreign Investment Always Good for Development?
Manuel R. Agosin
Part 1: Country Assessments
3. Islands of Possibility: MNCs and EconomicDevelopment in Brazil
4. Foreign Investment: The Polarization of the Mexican Economy
Enrique Dussel Peters
5. A Missed Opportunity: Foreign Investment and Sustainable Development in Argentina
Daniel Chudnovsky and Andrés López
6. Foreign Investment and Economic Development in Costa Rica: The Unrealized Potential
José Cordero and Eva Paus
Part 2: Political Economy of Natural Resources and The Environment
7. Investment Rules and Sustainable Development: Preliminary Lessons from the Uruguayan Pulp Mills Case
8. Foreigners in the Forests: Saviors or Invaders?
Nicola Borregaard, Annie Dufey and Lucy Winchester
9. Bucking the Trend: The Political Economy of Natural Resources in Three Andean Countries
10. Beyond Pollution Haloes: The Environmental Effects of FDI in The Pulp and Paper and Petrochemicals Sectors in Brazil
Luciana Togeiro de Almeida and Sueila dos Santos Rocha
11. Missing Links, Dashed Hopes: FDI Spillovers and Sustainable Industrial Development in Mexico’s Silicon Valley
Lyuba Zarsky and Kevin Gallagher
Kevin P. Gallagher is Assistant Professor of International Relations
at Boston University and Senior Researcher at the Global Development
and Environment Institute at Tufts University. He is the author of The Enclave Economy: Foreign Investment and Sustainable Development in Mexico's Silicon Valley, and Free Trade and the Environment: Mexico, NAFTA and Beyond and other books. He writes a regular column on globalization and development for The Guardian.
Daniel Chudnovsky (1944-2007) was Director of the Centro de Investigaciones para la Transformación (CENIT) and Professor at the Universidad de San Andrés. He is the author of The Elusive Quest for Growth in Argentina (with Andres Lopez).
For more on GDAE’s Globalization and Sustainable Development Program:
For more on GDAE's Working Group on Development and Environment in the Americas: