@inproceedings{McCann2011Democratic,
abstract = {This paper considers the relationship between democratic accountability in de- veloping countries and the policies they use to attract foreign direct investment (FDI). We isolate two policy areas that governments of developing countries use to attract FDI: the tax burden on firms and the regulatory standards within which they operate. Countries that maintain high business taxes can only attract FDI by offering a less regulated business environment, which may have associated po- litical costs. The extent to which democratic accountability constrains leaders in their tax/regulatory policy choices is our main line of analysis. The novelty of the paper is that it endogenously determines policy choices within a political economy framework that recognizes the trade-offs between attracting FDI and maintaining political control. Examination of firm-level survey data from foreign firms operating in eastern Europe and central Asian economies confirms our model's main conclusion: regulation is seen to be a relatively larger obstacle to doing business in countries with greater democratic accountability.},
address = {Kiel und Hamburg},
author = {Fergal McCann and Michael Dorsch and Eoin McGuirk},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {330},
language = {eng},
number = {56},
publisher = {ZBW - Deutsche Zentralbibliothek f\"{u}r Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft},
series = {Proceedings of the German Development Economics Conference, Berlin 2011},
title = {Democratic Accountability and the Relative Obstacles to Foreign Investment},
url = {http://hdl.handle.net/10419/48286},
year = {2011}
}
