Towards a Better Understanding of the Role of Foreign Direct Investment in Developing Countries with Special Focus on the 2012 Ethiopian Investment Law

Abstract

Although foreign direct investment (FDI) is a household term, its role in bringing about development is one of the most controversial and divisive issues that has generated a great deal of debate not only among scholars but also among politicians, the business community and even ordinary people. It is widely argued by the supporters of FDI that there is no growth, creation of wealth and prosperity without foreign investment. However, the precise definition, scope, characteristics, and role of FDI and its role to bring about development in general and sustainable development in particular in developing countries lack clarity and often tend to create confusion and controversy. Thus, it can be argued that FDI is still one of the most sensitive, complex as well as ideologically controversial issues in both academic and non-academic circles. There is a uniform understanding neither of its definition, scope and content nor about its effectiveness in alleviating or substantially...