Expropriation of foreign direct investments: sectoral patterns from 1993 to 2006

Hajzler, Christopher

doi:10.1007/s10290-011-0103-0

Cited by 98 publications

(90 citation statements)

References 32 publications

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“…The takeaway from the results is that clarity of responsibility produced by political mandates potentially gives voters more voice in economic policies. 23 The decision by Mexican President Ernesto Zedillo, a US-trained economist, to expropriate a few foreign firms between 1995 and 1998 (Hajzler 2012), at the same time as growing unpopularity with neoliberal policies (e.g., a 1995 Latinobarómetro poll showed that more than 77 percent of the respondents believed that the country was in a bad or very bad economic situation and only 13 percent responded that they expected the situation to get better), and during mid-term elections, also is an example of clarity of responsibility and political mandate at work. Figure A2: Effects of unified government and presidential vote share on expected economic freedom scores (full model).…”

Section: Resultsmentioning

confidence: 99%

Political Mandate and Clarity of Responsibility: Economic Policies under Rightist Governments in Latin America

Biglaiser

McGauvran

2022

Lat. American Res. Rev.

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Since the mid-1990s, some rightist governments in Latin America have adhered to a strict market orientation while others have shown less attachment to doctrinaire neoliberal policies, a puzzle as rightists are expected to favor minimal government intervention in the economy. In an environment over the past two decades in which market-oriented policies, in general, have grown increasingly unpopular with many Latin Americans, we contend that rightists have less political cover to endorse neoliberal policies. Using panel data for eighteen Latin American countries from 1995 to 2015, we find that, because of the clarity of responsibility that occurs under political mandates and the unpopularity of market reforms, mandate-holding rightist governments will tend to go against their ideological preferences and decrease neoliberal policies. Our findings indicate that as presidential vote margins increase and responsibility for unpopular economic policies becomes clearer, rightist executives will be less willing to support such policies, but only to a point. The results suggest that clarity of responsibility can influence presidential decision-making concerning unpopular policies, especially microeconomic policies, but this influence diminishes as presidents become more electorally secure.A partir de mediados de la década de los 90, algunos gobiernos latinoamericanos de derecha han adoptado políticas estrictas de apertura comercial, mientras que otros se han mostrado más alejados de adoptar políticas neoliberales. Esto es un elemento relevante de análisis ya que se espera que los gobiernos de derecha estén en contra de la intervención del gobierno en la economía. Usando una base de datos panel sobre 18 países latinoamericanos para el periodo de 1995 a 2015, encontramos que los gobiernos de derecha actúan en contra de sus preferencias ideológicas disminuyendo políticas neoliberales por dos razones: la claridad que los mandatarios tienen sobre sus responsabilidades y la impopularidad de las reformas de libre mercado en Latinoamérica. Nuestros hallazgos indican que, si el margen de votos en las elecciones presidenciales incrementa y el sentido de responsabilidad sobre la adopción de políticas económicas impopulares es claro, los gobernantes de derecha estarán menos dispuestos a adoptar este tipo de políticas de libre mercado.Since the late 1990s, many studies have investigated the economic policies of leftist governments in Latin America.

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Section: Resultsmentioning

confidence: 99%

Political Mandate and Clarity of Responsibility: Economic Policies under Rightist Governments in Latin America

Biglaiser

McGauvran

2022

Lat. American Res. Rev.

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“…They use the term 'natural resource trap' for the privatisation trap in the natural resource context. See also Hajzler (2012) for an overview of sectoral patterns of expropriation.…”

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confidence: 99%

“…Di Tella, Dubra and MacCulloch (2010) on the interaction between economic conditions on the one hand and social beliefs and political attitudes on the other. 13 Tomz and Wright (2010) present historical evidence for both expropriation and default and show that defaulting states tend also to expropriate. They also analyse how incentives to default and expropriate vary with the economic cycle, risk aversion of governments, and costs of default going back to the seminal paper of Eaton and Gersovits (1981).…”

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confidence: 99%

Natural Resources and Sovereign Expropriation

Baldursson

Fehr

2015

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. (this version February 15, 2015) Abstract A government wants to exploit a renewable resource, yielding a timevarying flow of rent, by leasing it at a fixed rate. Leasing contracts can be expropriated before expiration, albeit at a cost. To minimise transactions costs and avoid the 'resource curse' the government would prefer to enter into an infinitely long contract (i.e. sell the resource), if it could commit not to expropriate. However, with finite costs of expropriation credible commitment is impossible: the government either enters into finite contracts, expropriates with positive probability or does both. The value of the resource to the government is increasing in the cost of expropriation, but decreasing in the variability of the resource rent. 1 Terms of use: Documents in

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“…Three main explanations have been put forward in the literature (Hajzler, 2012). The first one relates to the importance of sunk costs, which is especially clear in resource extracting industries and utilities provision.…”

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confidence: 99%

“…For example, mineral extraction requires large investments in exploration and not reported separately, and are included in 'Other services'. The number of expropriation acts was collected by Kobrin (1987), Minor (1994 and Hajzler (2012) from reports of expropriations published in a wide range of periodicals. For more details refer to the appendix of Hajzler (2012).…”

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confidence: 99%

What Type of FDI is Attracted by Bilateral Investment Treaties?

2014

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Developing countries have increasingly engaged in Bilateral Investment Treaties (BITs) to attract foreign investors. While it is found that BITs are successful in attracting FDI, we argue that the effectiveness of BITs depends on the type of FDI. We find the effect of BITs to differ importantly across sectors of investment. FDI characterized by higher sunk investment costs responds more strongly to the signing of BITs. Given that the development impact of FDI differs according to the sector of investment, our results raise concerns on the effectiveness of BITs in attracting FDI in those sectors where it is considered most beneficial.

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Expropriation of foreign direct investments: sectoral patterns from 1993 to 2006

Cited by 98 publications

References 32 publications

Political Mandate and Clarity of Responsibility: Economic Policies under Rightist Governments in Latin America

Political Mandate and Clarity of Responsibility: Economic Policies under Rightist Governments in Latin America

Natural Resources and Sovereign Expropriation

What Type of FDI is Attracted by Bilateral Investment Treaties?

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