In the 1980s, after decades of scepticism or even hostility, the belief developed that multinationals could be an important component of a national development strategy. As a result, governments around the world have been wooing multinationals. Yet the challenge is to ensure that foreign investment genuinely furthers development strategies. It is thus crucial to assess whether, and under which conditions, FDI can contribute to the development of host countries. Does FDI stimulate or rather crowd out local investment? What is its impact on productivity and human capital? Do technology transfers to local firms in the host country really take place ? Should governments design specific incentives to attract multinationals?

This volume brings together recent empirical studies with a focus, first, on the national and sub-national institutional context for attracting FDI, including the role of regional policies and export processing zones (China, Vietnam); second, on the issue of FDI's contribution to development through various experiences, to which relatively little attention has been paid (South Africa, Morocco, Tunisia, East Asia, Sub-Saharan Africa). These papers were discussed at a workshop, co-organized by AFD (Agence Française de Développement) and IFRI (French Institute of International Relations) on June 10, 2004.