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While trade integration is often regarded as a principal determinant of economic growth, the empirical evidence for a causal linkage between trade and growth is ambiguous. This paper argues that the effect of trade in dynamic panel estimations depends crucially on the specification of trade. Both from a theoretical as well as an empirical point of view one specification is preferred: the volume of exports and imports as a share of lagged total GDP. For this trade measure, a positive and highly significant impact on economic growth can be found. -- Openness ; Trade ; Growth

The paper analyses the impact of natural resource abundance on selected governance indicators. In contrast to earlier studies that are mainly confined to cross-sectional analysis, we use a panel data set with a large number of countries and an extended period of time. Moreover, we employ an instrumental variable technique to account for endogeneity. The results show that exports of natural resources have, above all, led to an increase in corruption. This result is robust to both different model specifications and an alternative indicator for natural resource abundance. For other governance indicators, such as law and order and bureaucratic quality, we either find no results or results that lack robustness. -- Natural Resources ; Resource Curse ; Corruption ; Governance

Negotiations on the Economic Partnership Agreements between African, Caribbean and Pacific countries and the European Union have not been making much progress recently. How should the Partnership Agreements be structured to ensure a pro-development outcome and how could the negotiations gain more momentum in the months and years ahead?

SummaryTransnational Corporations are often accused by non‐governmental organisations of ignoring fundamental democratic rights, such as civil liberties and political rights, in the countries of their investments. This paper attempts to explore empirically the complex relationship between foreign investment and democracy in a systematic way, using different econometric techniques. In contrast to the public discussion over recent years and the view held by non‐governmental organisations, the results show that enhanced democratic rights are associated with higher foreign investment in the 1990s. Interestingly, this positive link does not hold for the 1970s and 1980s, when a substantial portion of foreign investment went to countries with repressive governments.

Many believe that multinational enterprises insensitively ignore political rights and civil liberties in the countries of their investments. Frequently, non-governmental organisations accuse multinationals of fostering repressive regimes in developing countries and consider foreign direct investment (FDI) as a tool of exploitation. This paper tries to examine empirically the complex relationship between democracy and FDI in a systematic way, using cross-sectional and panel data analysis. The results indicate that – on average – investments by multinationals are significantly higher in democratic countries, thereby refuting the hypothesis that political repression fosters FDI. Yet this positive link does not hold for the 1970s, when a considerable share of FDI flowed to countries with repressive regimes.

The main focus of the article is the link between foreign direct investment & fundamental workers' rights. It discusses how fundamental workers' rights, sometimes called core labor standards, can influence foreign direct investment flows. Analysis shows that, contrary to the conventional wisdom that foreign direct investment will predominately be attracted by countries with lower rights, improved workers' rights are in fact positively associated with foreign direct investment inflows. Concerns about "social dumping" or "a race to the bottom" with respect to workers' rights appear to be mistaken. This result even holds for poor developing countries. 3 Tables, 2 Appendixes, 28 References. Adapted from the source document.