4. Investment policy effectiveness
4.1 Public governance and institutions
4.1.1 From framework to implementation
In the implementation of investment policies Governments should strive to achieve: (1) integrity and impartiality across Government and independence in regulatory institutions, subject to clear reporting lines and accountability to elected officials; (2) transparency and predictability for investors; (3) a service-orientation towards investors, where warranted.
4.1.2 Inter-agency cooperation
Close cooperation and formal communication channels should be in place between institutions and agencies dealing with investors. The IPA should play a coordinating role given its comprehensive perspective on issues confronting investors.
4.1.3 Anti-corruption efforts
Governments should adopt effective anti-corruption legislation and fight corruption with appropriate administrative, institutional and judicial means, for which international best practices should serve as guidance. Investors should be held to adhere to good corporate governance principles, which include refraining from paying bribes and denouncing corrupt practices.
- 4.1.1 From framework to implementation
4.2 Dynamic policy development
Policy design and implementation is a continuous process of fine-tuning and adaptation to changing needs and circumstances. Periodic review (every 3-4 years) of performance against objectives should take place, with a view to: - verifying continued coherence of investment policy with overall development strategy - assessing investment policy effectiveness against objectives through a focused set of indicators - identifying and addressing underlying causes of underperformance - evaluating “return on investment” of the more costly investment policy measures (e.g. incentives).
4.3 Measuring investment policy effectiveness
Objectives for investment policy should be the yard stick for measurement of policy effectiveness. (Where countries have a formal investment strategy it should set out such objectives, see 1.1 above.) They should break down objectives for investment attraction and development impact, and set clear priorities. Performance (especially in terms of investment attraction) should be benchmarked against peers.
Indicators for objectives related to the attraction of investment may include: - investment inflows (total, by industry, activity,…), - investment flows as a share of gross output and capital formation (idem), - greenfield investment as a share of total investment, - positioning on UNCTAD's "investment potential/performance matrix".
- 4.1 Public governance and institutions