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Foreign Investment and Domestic Development: Multinationals and the State

Jenny Rebecca Kehl
Foreign Investment and Domestic Development: Multinationals and the State
ISBN: 978-1-58826-633-0
2008/163 pages/LC: 2008048407
"Persuasive and original.... Kehl makes a real contribution to our knowledge about the role that foreign direct investment plays (and more important, can play) in developing countries."—Jonathan Crystal, Fordham University


How is it that billions of dollars flow through the developing world without altering its reality of poverty and scarcity? Jenny Kehl explores the crucial relationship between foreign direct investment and domestic development, focusing on the wide variation in the capacity of governments to negotiate FDI to the advantage of their citizens.

To isolate the influence of political factors, Kehl examines one of the largest foreign investors, General Motors, in its relations with six host countries representing a range of political systems. Her cases, along with her larger statistical study, soundly refute conventional wisdom, demonstrating that the essential elements for successfully using FDI for development are political, not economic, and pointing to the political strategies and institutions that can best maximize the domestic benefits of FDI.


Jenny Rebecca Kehl is assistant professor of political science at Rutgers University–Camden and coordinator of the university’s International Public Service and Development Program.


  • Introduction: The Political Economy of Development.
  • The Politics of Profit: Foreign Investment as a Development Strategy.
  • Road Blocks: Ineffective Bureaucracies in Kenya.
  • Corruption: Impeding Pioneer Industries in Nigeria.
  • Growing Pains: Securing the Benefits of High Tech Investment in India.
  • Joint Ventures: Developing a Business Class in Malaysia.
  • Adelante: Government Commitments to Reduce Investment Risk in Chile. After NAFTA: Attracting Multinationals with Free Enterprise Zones in Mexico.
  • Looking Forward: The Trajectory of Foreign Investment and Domestic Development.