Découvrez le n°2 des « Mémos de la Chaire ETA »
Synthesis
In this paper we study the problem faced by firms that invest in foreign countries characterized by weak governance. Our focus is on extortion relying on the threat of expropriation or of bureaucratic harassment. We characterize an optimal extortion mechanism using Myerson’s optimal auction paradigm. We study the determinants of the quality of governance and whether and how the insurance of FDI improves upon it. We find that political risk insurance does not always improve upon all governance indicators. In particular, it may increase the risk of expropriation. However, we characterize a large variety of circumstances under which governance in the host country unambiguously improves : the risk of power abuse (extortion or bureaucratic harassment), the magnitude of the extortion bribes (to avoid abuses) and the bureaucrats’ revenue from corruption decrease with better insurance coverage of foreign firms.
This research has been supported by MIGA (Mutual Investment Guarantee Agency, World Bank Group)
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Agenda
jeudi 23 février 2012
Groupe de travail: D&G PhD - Development and Globalisation
MSE-Paris 1, Room S18
Francesco MOLTENI (Paris 1) :
Economie de l’Environnement et des Ressources Naturelles
45, rue des Saints-Pères, 75006 (Salle des thèses, 5e étage Bâtiment Jacob )
George Mackerron (LSE) : Hapiness is greater in natural environments
mardi 28 février 2012
Lunch séminaire d'économie appliquée
Campus Jourdan, bâtiment principal, rez-de-chaussée, salle 8 (12h30-13h30)
Antoine GOUJARD (LSE, London) : *
vendredi 9 mars 2012
9 mars, conference "Happiness and Economic Growth : Lessons from Developing Countries"
9 mars, conference "Happiness and Economic Growth : Lessons from Developing Countries" :
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