Thomas Farole

Foreign direct investment (FDI) is becoming increasingly critical to the economies of developing countries, in part due to a major expansion in the scope of global value chains (GVCs), whereby lead firms outsource parts of their production and services activities across complex international networks. While FDI delivers a number of important contributions in terms of investment, employment and foreign exchange, it is its spillover potential - the productivity gain resulting from the diffusion of knowledge and technology from foreign investors to local firms and workers - that is perhaps the most valuable contribution to long run growth and development. While substantial research has been undertaken on the existence and direction of spillovers from FDI, many questions remain. Moreover, there is a need to understand better the dynamics of spillovers in certain contexts, including: i) in low income countries, especially in Sub-Saharan Africa; ii) outside of manufacturing sectors (especially resource-based sectors); and iii) in the context of GVCs. This book presents the results of a groundbreaking study designed to address these issues drawing on detailed field research in eight countries (including five in Sub-Saharan Africa) over three sectors: agribusiness, apparel and mining. The book presents a summary of the results of this analytical work and discusses their implications for policymakers hoping to harness the power of FDI for greater development outcomes.

This toolkit provides a framework, guidelines, and practical tools for conducting an analysis of a country's trade competitiveness in terms of growth and share performance, diversification, and quality. It aims to facilitate the identification of the main constraints to improved trade competitiveness and the policy responses to overcome these constraints.

This book, designed for policymakers, academics and researchers, and SEZ program practitioners, provides the first systematic and comprehensive analysis of SEZ programs in Sub-Saharan Africa. It is the result of detailed surveys and case studies conducted during 2009 in ten developing countries, including six in Sub-Saharan Africa. The book provides quantitative evidence of the performance of SEZs, and of the factors which contribute to that performance, highlighting the critical importance not just of the SEZ itself but of the wider national investment climate in which it functions. It also provides a comprehensive guide to the key policy questions that confront governments establishing SEZ programs, including: if and when to launch an SEZ program, what form of SEZ is most appropriate, and how to go about implementing it. Among the most important findings from the study that is stressed in the book is the shift from traditional enclave models of zones to SEZs that are integrated – with national trade and industrial strategies, with core trade and social infrastructure, with domestic suppliers, and with local labor markets. Although the book focuses primarily on the experience of Sub-Saharan Africa, its lessons will be applicable to developing countries around the world.