But there is another area that deserves particular attention: good governance. This concept receives much attention in international discussions. For some, this means good macroeconomic policies; for others, strong institutions; and for yet others, no corruption.

The concept has a meaning in FDI as well, not least in respect to investment promotion. So what does this involve? Basically, to make IPAs and other public institutions that deal with investors more efficient, transparent and accountable. For example, Malaysia has had a very good experience with “client charters” – official documents that state the vision and mission of an institution and its standards of services. Offices in the Malaysian Industrial Development Authority have notes on their doors indicating how long a specific action should take. Another example is the Republic of Korea’s Office of the Investment Ombudsman. It has the authority to conduct direct investigations into grievances reported by foreign affiliates and the power to request co-operation from relevant administrative institutions. Once contacted by the office, government departments must address the issue within seven days. Between 2000 and mid-2004, 1765 grievances were processed, 1261 of which were settled and 349 were solved with the co-operation of related government departments.

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The Swedish national IPA, Invest in Sweden Agency, reports once a year on the national investment climate. This publicly available report highlights positive and negative sides of doing business in Sweden based on an annual foreign investors’ survey. The report has proven useful for the agency’s policy advocacy work, for instance, by helping to solve investors’ grievances.

Each of these can be elements in a strategy to improve good governance in investment promotion. They can increase the competitive advantage of an IPA and, by extension, the location – and make it more comfortable for investors to invest.

Karl P. Sauvant, director, Division on Investment, Technology and Enterprise Development, Unctad