【文章內(nèi)容簡介】 investment may be crowded out and domestic petition and entrepreneurship may be suppressed. FDI may worsen ine inequality and encourage reliance on the exploitation of local natural resources at the expense of the development of other productive sectors of the economy. In some cases, the activities of foreign investors have had a negative impact on human rights and the environment. As noted, the risk of negative effects may be greatest in relation to FDI in extractive industries, the most important sector for foreign investment in many developing countries. One of the benefits associated with economic activity generated by FDI is that ine from that activity may produce tax revenues that can be applied to fund social and other programmers designed to achieve development goals. In many developing countries, however, weak taxation regimes mean that governments do not succeed in capturing an adequate share of the ine resulting from FDI. Ine that is captured is sometimes squandered rather than reinvested to support longterm growth, including future foreign investment. Whether FDI will contribute to sustainable development will depend on a host of local factors including the nature and abilities of its human capital, the effectiveness of its environmental, labor and human rights standards and its tax system, its regulatory capacity and its capacity to absorb technology, which, in turn, is a function of its human resources and its technological infrastructure. How domestic policy can affect these factors to enhance FDI development impact is discussed in the next section. Investmentled development through domestic policy reform Reform of the international financial architecture and a successful conclusion to the Doha Round of WTO negotiations would both contribute to a stronger and more stable basis for continuing investment in developing countries. But the ongoing failure of the international munity to deliver results in either of these areas means that renewed focus must be placed on other strategies, including domestic reform in developing countries. In general terms, the elements of a domestic environment that encourage development through foreign investment are well understood, having been mapped out by, for example, the OECD in its Framework for Investment (2020) based on the 10 areas identified by the 2020 UN Monterrey Consensus on Financing for Development and the World Bank in its World Development Report 2020. A prehensive but not exhaustive list of policy areas include those that have direct effects on investment, like investment policy and investment promotion programmers, as well as those that have indirect effects, such as trade policy, petition policy, tax policy, corporate governance standards, policies for promoting responsible business conduct, human resource development and labor market policy, infrastructure development, and financial and public sector governance. The particular policy mix appropriate for a specific country will depend on its individual circumstances. Attempts to transfer regulatory structures from other countries, especially developed countries, with little or no adaptation to local conditions have not proved to be successful. As well, creating the right investment environment is not a onetime policy shift but rather a plex, multifaceted and longterm process (see box). Recent research shows that investment promotion programmers can have a positive effect on the attractiveness of a particular jurisdiction. On the other hand, trying to ‘pick winners’ has not been successful and the World Bank, among others, advocates moving away from specific incentives to domestic policy measures that improve the general climate for investment