CHAPTER 4

Public Policy and Regulation

The evolution of FDI policy is a consequence of the interplay of many macroeconomic policies such as industrial, trade, financial sector, labor market and fiscal policy. Each policy subset defines the broad contours of the economic growth process. As the growth process unfolds the economy experiences various kinds of shocks and problems caused by both internal and external factors. The magnitude of such disturbance is larger for an economy where regulations and institutions for economic development are not yet in place or else they do not have the core competencies to deliver growth. While tracing the modern economic history of the 20th century, it revealed that different model of industrial policies was ...

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