Competing for Foreign Direct investment: Efforts to Promote Nontraditional FDI in Costa Rica, Brazil, and Chile

This article examines government efforts in Costa Rica, Rio Grande do Sul in Brazil, and Chile to promote nontraditional foreign direct investment (FDI). Rather than attempting to account for the overall level of FDI attracted, this article seeks to explain the ability of governments to develop a well-targeted, responsive, and sustained strategy specifically to attract nontraditional FDI. It concludes that three independent variables play an important role in making some governments more effective than others at developing strategies to promote nontraditional FDI. These are the extent of the government's autonomy from special interest groups, both domestic and foreign; the extent of the government's transnational learning capacity; and the extent to which there is an ideological consensus among political parties in the country or state in favor of working closely with the business community. Roy C. Nelson is an associate professor of International Studies at Thunderbird, the Garvin School of International Management. He is currently completing a book entitledHarnessing Globalization: The Promotion of Nontraditional Foreign Direct Investment in Latin America.