Abstract
This paper examines whether the internal structural transformation of the major RIOs in Africa (member states 1. delegating more issue areas to the authority to the IO (delegation) and/or 2. accepting more majoritarian decisions making procedures within the IO that cannot be derailed by a national veto (pooling) and/or 3. the IO developing a more elaborate dispute settlement mechanism with binding adjudication (international dispute settlement) affect the decision calculus of FDI actors whether to invest more or less in a given member state. Using the MIA dataset on international authority, this paper utilizes time series analysis, traces the evolution of 7 major RIOs (AU, CEMAC, COMESA, EAC, ECOWAS etc) and finds that as the authority of these RIOs (its power vis-à-vis its members) increases, FDI in their member states increases as well. Supplementing the quantitative analysis with process tracing and case studies, the paper proposes two causal explanations of why increasing international authority of RIOs is good for their member states’ investment profile. First, as the issue area jurisdictions of an RIO increase (delegation), expert- or science-based, as opposed to domestic politically-driven decision making results into greater legitimacy for policy initiatives, which is rewarded by FDI actors. More elaborate dispute sentiment procedures also enhance legitimacy as the capacity of an RIO to legally sanction non-compliance increases. Second, as the RIOs’ capacity to compel coordination increases (pooling), it experiences efficiency gains in pursuing its mandate which decreases uncertainty and allows FDI actors to plan their investments in a more predictable fashion.
Details
Presentation Type
Paper Presentation in a Themed Session
Theme
Community Diversity and Governance
KEYWORDS
FDI, Africa, Economic Development, IGOs
