| Abstract: | Summary FDI in Latin America has witnessed a resurgence in the 1990s after the debt crisis and capital drought of the 1980s. This inflow results both from more market-friendly policies in the recipient countries and lower returns and growth in developed nations. The latter factor has also attracted many short-term, portfolio instruments to the continent which can be highly damaging to local economies when not properly regulated. Privatization has been among the more important country-specific variables attracting direct investors to the region. Despite the positive effects of FDI, Latin American countries are still beset with problems such as unequal distribution of income and poverty that direct investment is unlikely to ameliorate. |
