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We undertake a meta-analysis of the effects of international investment agreements for the protection of foreign investors on foreign direct investment using 2107 estimates drawn from 74 studies. Our meta-analysis finds robust evidence that effect of international investment agreements is so small as to be considered zero. However, our results do not rule out the possibility that the effect of these agreements is, in fact, positive and that current research methods are insufficiently powerful or precise to identify the underlying genuine effect. FDI from developed countries appears to be more responsive to the existence of investment protection, and there is evidence of publication-selection bias in favor of studies that find a positive effect for investor protection., Czech Science Foundation Grant Number 18-04630S, the Japan Center for Economic Research (JCER), the Zengin Foundation for Studies on Economics and Finance

Dramatic growth of investment disputes between foreign investors and host states rises serious questions about the impact of those disputes on investors. This paper is the first to explain increased uncertainty of investors about the outcome of arbitration, which may or may not lead to compensation for damages claimed by the investor. We find robust evidence that investment disputes lead to abnormal share fluctuations of companies involved in disputes with host countries. Importantly, while a positive outcome for an investor decreases uncertainty back to original levels, we document strong increase in the volatility of companies with negative outcome for the investor. We find that several variables including size of the award, political instability, location of arbitration, country of origin of investor or public policy considerations in host country explain large portion of the investor's uncertainty.

Online peer to peer lending (P2P) - allows people who want to borrow money to submit their applications on the platform and individual investors can make bids on the loan listings. The quality of information in credit appraisal becomes paramount in this market. The existing research to assess the role of what is known as soft information in P2P markets has so far been very limited and, inconclusive due to differences in approaches and methodological limitations. The aim of the paper is to discuss the role of soft information channels in predicting defaults in the P2P lending market and to assess the importance of soft information in the Fintech companies' credit analysis. Using a unique data of the Chinese P2P lending platform RRDai.com and new approach based on sets of hard and soft information, we compare the predicting performance of soft information, hard information and the combined role of both hard and soft information. We show that soft information can provide a valuable input in credit appraisal. The predicting power of soft information in our test was high, and together with hard information it can even help improve the loan performance. In exceptional situations characterized by the absence of hard financial data, soft information could be used, with caution, as an alternative.

The purpose of the paper is to discuss the effects of WTO accession on policy-making and institutional reforms in transition countries. This is done by looking at the experience of those transition countries which are already Members of the WTO. We start by examining the effect of accession on trade policy and distinguish between the effects of accession negotiations and those of autonomous policy initiatives. Other areas of domestic policy-making considered in the analysis include market access, governance, government budget, structural reforms, trade and investment arrangements with regional partners and macroeconomic management. We find that no precise blueprint of accession conditions can be ascertained, that WTO played a role, albeit not an exclusive one in the process of liberalization, that the costs of WTO Membership are not negligible, that the benefits of WTO Membership are also significant in terms of a better market access, improved governance and a recourse to better economic policies.

The purpose of the paper is to discuss the effects of WTO accession on policy-making and institutional reforms in transition countries. This is done by looking at the experience of those transition countries which are already Members of the WTO. We start by examining the effect of accession on trade policy and distinguish between the effects of accession negotiations and those of autonomous policy initiatives. Other areas of domestic policy-making considered in the analysis include market access, governance, government budget, structural reforms, trade and investment arrangements with regional partners and macroeconomic management. We find that no precise blueprint of accession conditions can be ascertained, that WTO played a role, albeit not an exclusive one in the process of liberalization, that the costs of WTO Membership are not negligible, that the benefits of WTO Membership are also significant in terms of a better market access, improved governance and a recourse to better economic policies.

This paper looks at the role of the key international agreements in the process of liberalization of the telecommunications industry. We analyse in particular the role of the WTO agreement in furthering liberalization around the world, and the extent to which it provides protection for foreign investors. The analysis includes assessments of not only market access but also the treatment of property rights, rights of way, financial conditions and regulations as well as issues related to market structure and competition. Outstanding issues representing impediments of these agreements are also identified. The approach is to a large extent based on a comparison with other relevant international agreements, especially with NAFTA. The WTO agreement comes out of the analysis quite well. It is an important instrument of protecting and safeguarding market access for foreign investors even though, undoubtedly, several areas of the agreement will be subject to pressures for further negotiations. Dieses Papier befasst sich mit der Rolle der bedeutendsten internationalen Abkommen im Liberalisierungsprozess der Telekommunikation. Speziell fragen wir nach dem Beitrag des WTO-Abkommens zur weltweiten Liberalisierung und nach dem Schutz, den es ausländischen Investoren gewährt. Die Analyse umfasst die Beurteilung der Regelungen über Marktzugang, Eigentumsrechte, Wegerechte, finanzielle Bedingungen und Regulierungen sowie Fragen der Marktstruktur und des Wettbewerbs. Ferner werden die noch offenen Probleme behandelt. Der Ansatz beruht in einem erheblichen Maße auf einem Vergleich mit anderen relevanten internationalen Abkommen, insbesondere NAFTA. Das WTO-Abkommen schneidet bei dieser Untersuchung recht gut ab. Es ist ein bedeutendes Instrument zur Sicherung des Marktzugangs für ausländische Anbieter, auch wenn zu erwarten ist, dass für Teile des Abkommens Druck zur Aufnahme weiterer Verhandlungen entstehen wird.

Non-transparency is a term given in this paper to a set of government policies that increase the risk and uncertainty faced by economic actors foreign investors. This increase in risk and uncertainty stems from the presence of bribery and corruption, unstable economic policies, weak and poorly enforced property rights, and inefficient government institutions. Our empirical analysis shows that the degree of non-transparency is an important factor in a country's attractiveness to foreign investors. High levels of non-transparency can greatly retard the amount of foreign investment that a country might otherwise expect. The simulation exercise presented in the statistical part of this paper reveals that on average a country could expect 40 percent increase in FDI from a one point increase in their transparency ranking. Pari passu, non-transparent policies translate into lower levels of FDI and hence lower levels of welfare and efficiency in the host country's economy. A nation that takes steps to increase the degree of transparency in its policies and institutions could expect significant increases in the level of foreign investment into their country. This increased investment translates into more resources, which in turn increases social welfare and economic efficiency.

This paper looks at the role of the key international agreements in the process of liberalization of the telecommunications industry. We analyse in particular the role of the WTO agreement in furthering liberalization around the world, and the extent to which it provides protection for foreign investors. The analysis includes assessments of not only market access but also the treatment of property rights, rights of way, financial conditions and regulations as well as issues related to market structure and competition. Outstanding issues representing impediments of these agreements are also identified. The approach is to a large extent based on a comparison with other relevant international agreements, especially with NAFTA. The WTO agreement comes out of the analysis quite well. It is an important instrument of protecting and safeguarding market access for foreign investors even though, undoubtedly, several areas of the agreement will be subject to pressures for further negotiations. Dieses Papier befasst sich mit der Rolle der bedeutendsten internationalen Abkommen im Liberalisierungsprozess der Telekommunikation. Speziell fragen wir nach dem Beitrag des WTO-Abkommens zur weltweiten Liberalisierung und nach dem Schutz, den es ausländischen Investoren gewährt. Die Analyse umfasst die Beurteilung der Regelungen über Marktzugang, Eigentumsrechte, Wegerechte, finanzielle Bedingungen und Regulierungen sowie Fragen der Marktstruktur und des Wettbewerbs. Ferner werden die noch offenen Probleme behandelt. Der Ansatz beruht in einem erheblichen Maße auf einem Vergleich mit anderen relevanten internationalen Abkommen, insbesondere NAFTA. Das WTO-Abkommen schneidet bei dieser Untersuchung recht gut ab. Es ist ein bedeutendes Instrument zur Sicherung des Marktzugangs für ausländische Anbieter, auch wenn zu erwarten ist, dass für Teile des Abkommens Druck zur Aufnahme weiterer Verhandlungen entstehen wird.

This paper looks at the role of the key international agreements in the process of liberalization of the telecommunications industry. We analyse in particular the role of the WTO agreement in furthering liberalization around the world, and the extent to which it provides protection for foreign investors. The analysis includes assessments of not only market access but also the treatment of property rights, rights of way, financial conditions and regulations as well as issues related to market structure and competition. Outstanding issues representing impediments of these agreements are also identified. The approach is to a large extent based on a comparison with other relevant international agreements, especially with NAFTA. The WTO agreement comes out of the analysis quite well. It is an important instrument of protecting and safeguarding market access for foreign investors even though, undoubtedly, several areas of the agreement will be subject to pressures for further negotiations.

The linkages between trade and resource mobilization are complex and not well defined in theory. To what extent does trade policy affect resource mobilization and what are the mechanisms? We argue that trade policy is a key factor of influencing the domestic fundamental balance between aggregate savings and investment. The main effect of trade policy on resource mobilization stems from its contribution to static and dynamic gains from trade. But the effect of trade policy on the supply of financial resources also operates through several channels including through linkages of trade policy with foreign investment, government revenues, income distribution, foreign aid. The paper looks at direct and indirect channels, and makes a distinction between short and long term effects of different trade strategies. We also briefly review trade barriers in goods and services affecting developing countries and the potential gains from further liberalization. The long term gains from trade liberalization are substantial, but they may have to be set against short-term adjustments costs. The latter could and should be reduced by effective institutional and tax reforms.

The linkages between trade and resource mobilization are complex and not well defined in theory. To what extent does trade policy affect resource mobilization and what are the mechanisms? We argue that trade policy is a key factor of influencing the domestic fundamental balance between aggregate savings and investment. The main effect of trade policy on resource mobilization stems from its contribution to static and dynamic gains from trade. But the effect of trade policy on the supply of financial resources also operates through several channels including through linkages of trade policy with foreign investment, government revenues, income distribution, foreign aid. The paper looks at direct and indirect channels, and makes a distinction between short and long term effects of different trade strategies. We also briefly review trade barriers in goods and services affecting developing countries and the potential gains from further liberalization. The long term gains from trade liberalization are substantial, but they may have to be set against short-term adjustments costs. The latter could and should be reduced by effective institutional and tax reforms.

Non-transparency is a term given in this paper to a set of government policies that increase the risk and uncertainty faced by economic actors foreign investors. This increase in risk and uncertainty stems from the presence of bribery and corruption, unstable economic policies, weak and poorly enforced property rights, and inefficient government institutions. Our empirical analysis shows that the degree of non-transparency is an important factor in a country's attractiveness to foreign investors. High levels of non-transparency can greatly retard the amount of foreign investment that a country might otherwise expect. The simulation exercise presented in the statistical part of this paper reveals that on average a country could expect 40 percent increase in FDI from a one point increase in their transparency ranking. Pari passu, non-transparent policies translate into lower levels of FDI and hence lower levels of welfare and efficiency in the host country's economy. A nation that takes steps to increase the degree of transparency in its policies and institutions could expect significant increases in the level of foreign investment into their country. This increased investment translates into more resources, which in turn increases social welfare and economic efficiency.

Discussions about international capital movements raise extremely important and controversial questions. Why should countries open up their capital accounts, especially considering that unrestricted international capital movement is a relatively new phenomenon? For example, many OECD countries have not eliminated their foreign exchange restrictions only until the 1980's. If the answer is unequivocally affirmative, does it matter how fast should countries do so? Should they wait until all essential pieces of the policy package are in place before they eliminate all restrictions? How are international capital movements related to domestic financial sectors? Is there a difference between opening to competition an industry such as car manufacturing as compared to the banking sector? Should the opening of the banking sector be governed by different rules? Rules about foreign exchange restrictions are already in place in the IMF Articles. Until recently, the IMF Articles only called for the elimination of foreign exchange restrictions on the current account. The ongoing discussion and the controversy about globalization that calls for the capital account liberalization introduces, therefore, a relatively new element into the whole discussion. These questions have also implications for the World Trade Organization. It is well known, that the Uruguay Round Agreements have already provided a coverage for a number of aspects that are directly related to foreign investment. Rules established elsewhere such as in the context of changes to the IMF Articles will obviously have an important bearing for the implementation of rules agreed in the Uruguay Round. This raises a variety of other questions in the mind of some observers. Who should decide about the rules on capital account liberalization? What rules? IMF? What is the role of the WTO? How does one link the two? All of the questions raised above are clearly extremely important and most of them are discussed in the following paper by John Williamson. Mr. Williamson's presentation is based on his lecture and discussion which was delivered on 17 June 1999 at the WTO. The actual text that follows is a transcript of that lecture.

Discussions about international capital movements raise extremely important and controversial questions. Why should countries open up their capital accounts, especially considering that unrestricted international capital movement is a relatively new phenomenon? For example, many OECD countries have not eliminated their foreign exchange restrictions only until the 1980's. If the answer is unequivocally affirmative, does it matter how fast should countries do so? Should they wait until all essential pieces of the policy package are in place before they eliminate all restrictions? How are international capital movements related to domestic financial sectors? Is there a difference between opening to competition an industry such as car manufacturing as compared to the banking sector? Should the opening of the banking sector be governed by different rules? Rules about foreign exchange restrictions are already in place in the IMF Articles. Until recently, the IMF Articles only called for the elimination of foreign exchange restrictions on the current account. The ongoing discussion and the controversy about globalization that calls for the capital account liberalization introduces, therefore, a relatively new element into the whole discussion. These questions have also implications for the World Trade Organization. It is well known, that the Uruguay Round Agreements have already provided a coverage for a number of aspects that are directly related to foreign investment. Rules established elsewhere such as in the context of changes to the IMF Articles will obviously have an important bearing for the implementation of rules agreed in the Uruguay Round. This raises a variety of other questions in the mind of some observers. Who should decide about the rules on capital account liberalization? What rules? IMF? What is the role of the WTO? How does one link the two? All of the questions raised above are clearly extremely important and most of them are discussed in the following paper by John Williamson. Mr. Williamson's presentation is based on his lecture and discussion which was delivered on 17 June 1999 at the WTO. The actual text that follows is a transcript of that lecture.

This paper examines the interplay between exchange rate regimes and policies and commercial policy in six transition economies. In all these economies the rate of protection afforded domestic industry by the exchange rate has been eroded by high rates of inflation and insufficient growth in productivity. As a result, there has been pressure on governments to increase trade barriers and each country examined has had recourse to various means of restricting imports. We argue that more flexible management of the nominal exchange rate would be a preferable way of dealing with the real appreciation of these countries' currencies. exchange rates, trade policy, transition economies.

Much has been recently written about the Multilateral Agreement on Investment (MAI) that has been negotiated by OECD countries. Perhaps even more has been said by the critics of those who would like to see an agreement of this kind extended among other countries. There has indeed been a great deal of toing and froing about the desirability of MAI and even misunderstandings about its merits. The principal question of this paper is whether there is any need for MAI. There are arguments in favour and against and this paper provides a short review. On balance, the positive aspects of a multilateral agreement should outweigh the negative ones. The novelty of the paper is the attempt to address the critical voices. Given the lukewarm reaction in some countries, it would seem sensible to pay more attention to these arguments - a feature that may only now become something of pressing need in the light of the difficulties encountered in the OECD negotiations.

Management of capital inflows has unexpectedly become a major challenge in transition economies. These countries were expected to have an insatiable demand for foreign capital, and an excess demand for capital inflows was, therefore, predicted by most observers. Foreign investors are also known to be very selective in their choice of markets, and these countries were a big unknown. Moreover, macroeconomic policy in these countries has been dominated by the objective of disinflation. We explain in this paper the reasons why some transition countries have been an attractive market for foreign investors and how important has foreign capital been for these countries. But the bulk of the paper provides an assessment of government policies to manage foreign capital inflows. We evaluate the policies against the background of different government objectives and in terms of the actual policy instruments used by the monetary authorities, the timing and sequencing and the costs of these interventions. We argue that the initial responses to capital surges were poor; the authorities were reluctant to adjust their original policies and learn from the experiences elsewhere. Eventually, their policy responses were changed but until the costs of inertia became too high. The authorities have effectively used sterilization policies, more flexible exchange rate policies combined with tight monetary and fiscal policies. They also understood that an effective management of capital flows must start from well functioning markets, and have been prepared to adopt structural policies whenever market imperfections could be identified.

Much has been recently written about the Multilateral Agreement on Investment (MAI) that has been negotiated by OECD countries. Perhaps even more has been said by the critics of those who would like to see an agreement of this kind extended among other countries. There has indeed been a great deal of toing and froing about the desirability of MAI and even misunderstandings about its merits. The principal question of this paper is whether there is any need for MAI. There are arguments in favour and against and this paper provides a short review. On balance, the positive aspects of a multilateral agreement should outweigh the negative ones. The novelty of the paper is the attempt to address the critical voices. Given the lukewarm reaction in some countries, it would seem sensible to pay more attention to these arguments - a feature that may only now become something of pressing need in the light of the difficulties encountered in the OECD negotiations.

Management of capital inflows has unexpectedly become a major challenge in transition economies. These countries were expected to have an insatiable demand for foreign capital, and an excess demand for capital inflows was, therefore, predicted by most observers. Foreign investors are also known to be very selective in their choice of markets, and these countries were a big unknown. Moreover, macroeconomic policy in these countries has been dominated by the objective of disinflation. We explain in this paper the reasons why some transition countries have been an attractive market for foreign investors and how important has foreign capital been for these countries. But the bulk of the paper provides an assessment of government policies to manage foreign capital inflows. We evaluate the policies against the background of different government objectives and in terms of the actual policy instruments used by the monetary authorities, the timing and sequencing and the costs of these interventions. We argue that the initial responses to capital surges were poor; the authorities were reluctant to adjust their original policies and learn from the experiences elsewhere. Eventually, their policy responses were changed but until the costs of inertia became too high. The authorities have effectively used sterilization policies, more flexible exchange rate policies combined with tight monetary and fiscal policies. They also understood that an effective management of capital flows must start from well functioning markets, and have been prepared to adopt structural policies whenever market imperfections could be identified.

In the last ten years, there has been a sea change in trade and related policies in emerging markets. This results from autonomous reforms undertaken in conjunction with macro-economic stabilization programmes. Many non-tariff measures have been eliminated and tariffs, now the principal trade instrument, have been rationalized and reduced. Considerable increases in security of market access result from increased membership of the GATT/WTO system, which itself underwent important changes as a result of the Uruguay Round, further developed in the first Ministerial Meeting of the WTO in Singapore in December 1996. The systemic changes and the expansion of WTO membership to the transition and other economies mark a dramatic change in international economic relations.

The authors assess inflation in Czechoslovakia between 1985 and 1991 and identify the main causes of inflation through a literature survey and empirical studies. The official prices in centrally planned economies were never perceived by central planners to be fully market clearing. Only by coincidence would the overall price level correspond to the level associated with general equilibrium. What is missing in official price indices in centrally planned economies - including the consumer price index - is suppressed inflation, manifast in queuing for products, forced substitution of demand, and forced savings. Also missing is hidden inflation, associated with practices that disguise price increases behind cosmetic or other change in product quality. The authors argue that inflationary pressures in Czechoslovakia in 1985-89 originated mainly in the investment sector. Even though the investment sector was strictly controlled, making it difficult for open inflation to emerge, the scope for inflationary pressures was great in Czechoslovakia. Such pressures arose from a mixture of factors, including poor investment planning, accommodating government finance, and the high priority given to investments and social consumption. For Czechoslovakia, the official price indices show virtually no inflation between 1985 and 1989, when there were long waiting lists for such products as cars and state and cooperative flats. Trends in these price indices do not seem to depend on the method used for constructing them, according to the sensitivity tests conducted by Czechoslovakia's Federal Statistical Office. Obviously, the official price indices failed to capture the full extent of economic disequilibrium in that period. But the extent to which official price indices understated inflationary pressures was not serious in Czechoslovakia, compared with other centrally planned economies. Estimates of hidden inflation for 1985-89 range from 0.5 percent to 2 percent a year in consumer markets and about 3 percent in the industrial sector. Estimates for suppressed inflation were less than 5 percent. The relatively small inflationary gap is indirectly confirmed by the sharp inflation associated with the recent price liberalization that subsided in a relatively short period, and both suppressed and hidden inflations have virtually disappeared. Estimates of hidden inflation were based on benchmark price comparisons between Czechoslovakia and such market economies as Austria. Those for suppressed inflation were based on disequilibrium econometric models of asset holdings and on conjecture tests.

In this report the authors have analyzed pricing of the centrally planned economies (CPEs) in the highly competitive export markets of the EC countries in the first half of the 1980s. They found that the CPEs'export prices were lower than prices in both developed and developing countries. Manufactured goods from CPEs were underpriced an average 31 to 45 percent - even more on some commodities. Protection of EC countries doesn't seem to be a factor in CPE underpricing of manufactured goods. This could not be explained either by a deliberate policy of CPEs to penetrate Western markets. The CPEs inability to upgrade manufactured exports that are subject to quotas suggests serious quality constraints on exports of manufactured goods. They appear to underprice their manufactured exports not because of cost advantages that make them more competitive, but because most of their manufactured goods are inferior in quality to their competitors.

The main aim of this book is to assess the importance of international rules for foreign direct investment and the major challenges to international harmonization of those rules. Particular attention is paid to the most controversial and contentious issues with the view of appraising the prospects for establishing global rules. The book is divided into three parts; the first part includes papers assessing the role of national and international legislation with further distinction being made between bilateral, regional and multilateral legal frameworks. The second part addresses regulatory issues of technology transfer, labor, environment, subsidies and investment incentives, national security, public services and sovereign wealth funds. The final part looks at the experience of some international fora in addressing these issues and at some theoretical and conceptual problems of rule harmonization. The papers have been written by legal and economic scholars from leading universities.