Neo-strongLiberalstrong Policy and Foreign Direct Investment in Africa.pdfVIP

International Journal of Business and Social Science Vol. 3 No. 17; September 2012 Neo-Liberal Policy and Foreign Direct Investment in Africa Yassaman Saadatmand Professor and Department Head Armstrong Atlantic State University Department of Economics Savannah, GA. 31419, USA. Jeremy Choquette Graduate Student Armstrong Atlantic State University Department of Economics Savannah, GA. 31419, USA. Abstract This paper analyzes the effects of Neo-liberal policy on FDI in Africa. It uses Freedom Index scores provided by the Heritage Foundation and the Wall Street Journal as a proxy for implementation of Neo-liberal policy. Using a panel-data regression from 1998to 2009, we find tha t the only Freedom Index measurement that has a statistically significant and positive effect on FDI in Africa was the absence of corruption, suggesting that Neo- liberal policy has had little significance in the FDI-decision making process in the region. Key words: neo-liberal; foreign direct investment, freedom index, Africa Keywords: neo-liberal, Foreign direct investment, Africa, Freedom Index. I. Introduction This paper studies the effects of neo-liberalism on Foreign Direct Investment in Africa. Since the early 1980s and the ascendance of the “Washington consensus”,many economists have shifted to the belief that a more liberalized economy will promote more economic growth and development. Con