March 10, 2014 | Contribution by
Laura Alfaro is the Warren Alpert Professor of Business Administration at Harvard Business School
Intel Pentium III 866 Mhz, Costa Rica.
Photo credit: Flickr @Luigi Rosa (http://www.flickr.com/photos/lrosa/)
Why are some countries better able to attract multinationals than others? To explore possible answers to that question, the JKP recently looked at the case of Costa Rica, which in 1996 made headlines when it attracted Intel to invest and has since attracted enormous foreign investment. We asked Laura Alfaro – who was Costa Rica’s Minister of National Planning and Economic Policy (2010-2012) and is now back in academia as the Warren Alpert Professor of Business Administration at Harvard Business School – about the relative roles of the private and public sectors and what countries can do to attract multinationals.
She says that she welcomes developing countries’ renewed interest in industrial policy, but she insists that this shouldn’t mean a debate on public versus private sectors, given that each sector has a vital role to play. She also stresses Costa Rica’s efforts to create an enabling environment to both attract foreign investment and allow local entrepreneurs to benefit from the investment, rather than just tax incentives and subsidies.
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