Attracting Foreign Investment to Arab Countries: Getting the Basics Right

Abstract Foreign direct investment (FDI) is being sought by most, if not all, developing countries as a means of complementing the level of domestic investment, as well as securing economy-wide efficiency gains through the transfer of appropriate technology. To this end, policy makers have considered various incentive structures to attract FDI. This paper differentiates between "good" and "bad" types of incentives for FDI, with special focus on the experience and potential of the Arab countries.