Providing Incentives for Investment : Advice for policymakers in developing countries

Are tax incentives effective at attracting investment? Or are they a waste of resources? The answer depends on the policies used and the sectors where investment is sought. This note consolidates the policy implications of the latest research by the World Bank Group's investment climate advisory services on the efficacy of investment incentives. The research finds that such incentives are ineffective where investment climates are weak, and they cannot compensate for such deficiencies. Moreover, even where incentives are effective in attracting investment, they have significant costs. When incentives are clearly ineffective, political considerations often drive their continued use. This note identifies best practices for incentive policy and administration and provides a framework for analyzing the likely effectiveness of investment incentives under different conditions and in different types of countries.

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Bibliographic Details
Main Author: James, Sebastian
Language:English
Published: World Bank, Washington, DC 2010-01
Subjects:ACCELERATED DEPRECIATION, AMOUNT OF CAPITAL, AUDITS, BARRIERS TO INVESTMENT, BUSINESS ENVIRONMENT, BUSINESS ENVIRONMENTS, CAPITAL INVESTMENTS, CHECKS, COMPETITIVE MARKETS, COMPETITIVENESS, CORPORATE TAX, CORPORATE TAX RATE, DEPRECIATION ALLOWANCES, DEVELOPING COUNTRIES, DEVELOPING ECONOMIES, DOUBLE TAXATION, EXCLUSION, EXPENDITURE, FINANCE CORPORATION, FINANCIAL CRISIS, FISCAL POLICY, FOREIGN DIRECT INVESTMENT, FOREIGN INVESTMENT, GDP, GOOD INVESTMENT CLIMATE, GOVERNMENT REVENUE, HOME COUNTRY, HOST COUNTRY, INCENTIVES TO INVESTORS, INCOME, INFRASTRUCTURE PROJECTS, INTERNATIONAL FINANCE, INVESTMENT ALLOWANCES, INVESTMENT CLIMATE, INVESTMENT CLIMATES, INVESTMENT DECISIONS, INVESTMENT ENVIRONMENT, INVESTMENT GROWTH, INVESTMENT INCENTIVES, INVESTMENT POLICY, INVESTMENT PROCEDURES, INVESTMENT PROCESS, INVESTMENT PROMOTION, INVESTMENT TAX CREDITS, JOB CREATION, LEVEL PLAYING FIELD, LIQUIDITY, LOCAL ECONOMIES, LOCAL ECONOMY, MARGINAL COST, MULTIPLIER EFFECTS, NATURAL RESOURCES, OPPORTUNITY COSTS, PER CAPITA INCOME, POLITICAL CONSIDERATIONS, POSITIVE EXTERNALITIES, POTENTIAL INVESTORS, PUBLIC FUNDS, PUBLIC GOOD, RED TAPE, RENT SEEKING, RETURNS, SINGLE TAX, STARTUP, STATEMENTS, TAX, TAX ADMINISTRATION, TAX BASE, TAX BENEFITS, TAX CODE, TAX COMPETITION, TAX CREDIT, TAX EVASION, TAX EXEMPTIONS, TAX EXPENDITURE, TAX INCENTIVE, TAX INCENTIVES, TAX LAWS, TAX LIABILITY, TAX PAYMENTS, TAX POLICIES, TAX POLICY, TAX PROVISIONS, TAX RATE, TAX RATES, TAX RETURNS, TAX REVENUE, TAX REVENUES, TAX SIMPLIFICATION, TAX SPARING, TAX SYSTEM, TAXPAYERS, TRANSFER TAX, TRANSPARENCY, UNEMPLOYMENT,
Online Access:http://documents.worldbank.org/curated/en/2010/01/12091377/providing-incentives-investment-advice-policymakers-developing-countries
https://hdl.handle.net/10986/10511
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