Missing Links: Foreign Investment and Industrial Development in Costa Rica and Mexico

This article offers an analytical framework for understanding the missing links between FDI and development, and applies it to the high technology sectors of Costa Rica and Mexico, the two countries in Latin America that have attracted the highest percentage of FDI in manufacturing. Since the advancement of knowledge-based assets in this sector is at the heart of structural change and development, we focus specifically on the conditions that enable or prevent positive knowledge spillovers from FDI. We identify two main reasons for the missing links between high-tech FDI and the development of indigenous knowledge-based assets in Costa Rica and Mexico. First, their governments did not have a coherent strategy, which would have spelled out the needed government policies to advance national capabilities, overcome market failures, and support the integration of national producers into TNCs’ global production networks. Second, there were limitations on the spillover potential from FDI. In Costa Rica and Mexico, technology or scale requirements for inputs made it difficult for large TNCs to source domestically beyond simple inputs like packaging materials. In Mexico, fundamental changes in the organization of global production chains in the computer industry led TNCs to rely on their global contract manufacturers rather than work with potential Mexican input suppliers.     

Confronting the Middle Income Trap: Insights from Small Latecomers

Middle income countries have always faced the challenge of how to move from commodity production to more knowledge-intensive activities. The current globalization process is turning this middle income dilemma into a possible middle income trap. To understand better how countries can achieve broad-based upgrading to confront the middle income trap, we develop an analytical framework that links the macroeconomic context with microeconomic behavior and mesoeconomic conditions contingent upon path dependency and global circumstances. This capabilities-based approach draws from structuralist and evolutionary economic thought and global value chain analysis. We use the approach to analyze the particular set of factors that have enabled or constrained upgrading efforts under a liberal trade and investment regime in five small latecomers: Chile, the Dominican Republic, Jordan, Ireland, and Singapore. The country analyses demonstrate that strategic, pro-active, and coherent government policies for capability advancement are a key determinant of upgrading in open economies, both at the country level and in the development of ??pockets of excellence.??     

The Rise and Fall of the Celtic Tiger: When Deal-Making Trumps Developmentalism

Over the last two decades, the Irish economy has experienced some of the most remarkable turnarounds in development history. Long one of the poorest countries of Western Europe, with a GDP p.c. of 62?% of the OECD average in 1990, Ireland closed and surpassed this income gap during the 1990s, giving rise to the Celtic Tiger. But by the late 2000s, the country was mired in deep economic crisis. Grounded in a capabilities-based approach, the analysis demonstrates the important role of proactive government policies in promoting social capabilities, advancing local firm capabilities, and supporting the movement of transnational corporations (TNCs) toward higher value-added activities in the host country. The analysis highlights that the presence of TNC production does not automatically translate into technology spillovers to local producers. It illustrates how some location- and time-specific contingencies contributed to successful economic outcomes while others made their achievement more difficult. And it shows how misguided microeconomic incentives and neglect of macroeconomic fundamentals can seriously derail an upgrading strategy and lead to economic crisis.     

Political parties and the transnational mobilisation of the emigrant vote

The relationship between political parties and voters is usually analysed in a national framework. However, the majority of states worldwide allow their emigrant citizens to have an absentee vote. This article analyses how parties confront the challenge of mobilising voters across borders. It presents an analytical framework for comparing the scope of party transnational mobilisation strategies across different electoral systems. Drawing on a contextualised qualitative analysis, the article analyses transnational electoral mobilisation of the emigrant vote in recent elections in Spain, France, Italy and Romania. The analysis shows that a cost–benefit analysis of electoral incentives explains the scope of transnational campaign efforts of many of the political parties. Yet the article also suggests locating the analysis of party strategies in the particular context of the transnational electoral field, including the high dispersion, uncertainty and volatility of the emigrant vote and the overlap between the electoral arenas among emigrants and at home.