U.S. Policy toward Foreign Direct Investment

Abstract

Foreign investment policy is an increasingly important part of overall foreign policy. The authors investigate the substance of U.S. outgoing foreign direct investment (OFDI) and incoming foreign direct investment (IFDI) policy in terms of a small set of policy values and process factors. The policy values are domestic prosperity, national autonomy, and national security. The process factors are ideological consonance, impact transparency, the diffusion and concentration of perceived costs and benefits, and the political capacity of groups and institutions. These considerations illuminate the relative stability in both areas of policy since World War II, and help to explain the changes that did take place. The paper concludes with a forecast that, despite the oft-heard prediction that economic nationalism is on the increase, U.S. policies toward foreign investment will remain much the same during the eighties as they have been Since World War II.