Search results

The authors trace Singapore's public policy of increasing tax concessions and infrastructural spending - in effect subsidies to private firms - and use an open-economy, neoclassical model to show how, by attracting "footloose" foreign capital and investment levels, these policy measures can drive growth. The consequent transformation of living standards in Singapore suggests, in accordance with theory but contrary to most practice, that for some less-developed countries effectively zero tax on foreign direct investment may be a beneficial strategy. (DSE/DÜI)