world bank the effectiveness of promotion agencies at attracting foreign direct investment phần 5

The Functions of Investment Promotion Agencies and Their Effectiveness / 37

tively new. For example, Wells and Wint (2001) did not recog￾nize this function in the first edition of their book on promotion

in 199029 but they emphasized it in their 2001 revision.

Similarly, many experts have underestimated the role of policy

advocacy when providing advice to IPAs in developing countries

because they did not experience the same urgency in their coun￾try of origin. Irish or Welsh experts, for example, may not

emphasize this function elsewhere because their home countries

have a relatively good investment environment.

The good news is that there is some awareness of the impor￾tance of this function in the countries with a relatively poor

investment climate. Apparently, these countries have tended to

allocate proportionally more financial resources toward this

activity.30 By allocating resources to the improvement of the cli￾mate for foreign investors, in most cases the agency adds benefits

to local investors. Usually, what is good for foreign investment,

in terms of investment climate, is equally good for the local

investor. Because domestic investors also benefit from the efforts

of the promotion agency to improve the climate for foreign

investment, this can help the agency to deal with criticism that

foreign investors get special attention.

Although the amount of money dedicated to this function may

be small, virtually every agency reported undertaking some form

of policy advocacy. Participation in government-led task forces

seems to be the preferred channel: 80 percent of IPAs surveyed

said they use this method to improve the investment climate. Next,

IPAs count on holding meetings and other interactions with the

private sector to receive feedback on issues in the investment cli￾mate. About 60 percent of the agencies said they undertake

investor perception surveys concerning the domestic investment

climate, and most of them repeat the survey exercise annually.

Who leads the policy advocacy activities? The general manag￾er or senior managers are by far the key people handling these

issues. In about one-third of the countries, members of the

agency’s board or committee get involved, as well.