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Bhagwati, J.N., Dinopoulos, E. and Wong, K.Y. (1992) Quid pro quo Foreign Investment. Proceedings of the Hundred and Fourth Annual Meeting of the American Economic Association, 186-190.

has been cited by the following article:

• TITLE: FDI Regulatory Reform and Political Beliefs: A Political Economy Approach

  AUTHORS: Louis Jaeck, Sehjeong Kim

  KEYWORDS: Foreign Direct Investment, Lobbying, Common Agency, Beliefs, Political Economy

  JOURNAL NAME: Theoretical Economics Letters, Vol.6 No.6, November 11, 2016

  ABSTRACT: This paper analyzes the setting of a reform towards liberalization of FDI policies as a political compromise pressured by the lobbying of a domestic lobby and a foreign MNC lobby. Using a common agency model of lobbying, we show that, under specific conditions, the interest group’s influence is not distortive for a critical distribution of supporters over non-supporters of the reform. Also, our political economy framework shows that exogenous provision of information on the beneficial effects of FDI liberalization paradoxically weakens the reform process.