The institutions of foreign direct investment in developing countries and social /economic outcomes: A justice perspective

This dissertation investigates the relationship between foreign direct investment policy and human development in developing countries. It is widely assumed that the presence of foreign direct investment---regardless of how it is brought in or the conditions under which it operates---will always contribute to a developing country's economic growth and development, and that this in turn will always eventually lead to improvements in that country's social development. My comparative and quantitative studies challenge this widely held assumption. The comparative study examines the foreign direct investment environments of Cuba and Jamaica, and the quantitative study examines the environment of 30 developing countries. My findings in both studies suggest that it is only when human development is itself the primary objective of a state's foreign direct investment policy that human development is reliably achieved. The results have implications for future business ethics research. We should not ignore the role of institutions. Managers' behavior is partially a function of the surrounding socially constructed institutions, and thus, ethical outcomes can be influenced by how the game is designed and structured. It is not enough to prescribe that managers act in a way that may be ethical but contrary to what is rational given the existing economic system. Additionally, in practice, managers do influence the rules of the game, and it is important that we as scholars do not ignore the moral implications of their actions.