THE EFFECTIVENESS OF TAX INCENTIVES IN ATTRACTING FOREIGN DIRECT INVESTMENT
I - INTRODUCTION / STATEMENT OF THE PROBLEM
Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area. It also means the quantitative and qualitative changes in the economy. Such actions can involve multiple areas including development of human capital, critical infrastructure, regional competitiveness, environmental sustainability, social inclusion, health, safety, literacy, and other initiatives .
From the above, it is obvious that economic development is a permanent preoccupation of policy makers in all economies worldwide and more so in developing economies which are still not fully industrialized.
Huge capital investment is necessary for economic development. This is lacking in developing countries as they are principally consumer based economies as opposed to the producer based economies that constitute the developed world. The classical economists are of the view that most developing countries are endowed with numerous natural resources, which when refined, could serve as engine for growth and development. They argue that, because of the low-income base and the high propensity to consume of the occupants of these developing countries, their levels of savings are low, which further translate to low capital formation and low productivity hence, the existence of high rate of poverty. These groups of thinkers therefore, suggested that to break this vicious circle of poverty, Foreign Direct Investment (FDI) must be encouraged to complement domestic investment so as to provide these developing countries with their desired growth and development .
Capital flows is a term used to describe the movement or flow of money as it relates to activities such as investing, trading goods and services, or the operation of a business enterprise. The term is often used to describe internal processes within a business that involve purchasing necessary
Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area. It also means the quantitative and qualitative changes in the economy. Such actions can involve multiple areas including development of human capital, critical infrastructure, regional competitiveness, environmental sustainability, social inclusion, health, safety, literacy, and other initiatives .
From the above, it is obvious that economic development is a permanent preoccupation of policy makers in all economies worldwide and more so in developing economies which are still not fully industrialized.
Huge capital investment is necessary for economic development. This is lacking in developing countries as they are principally consumer based economies as opposed to the producer based economies that constitute the developed world. The classical economists are of the view that most developing countries are endowed with numerous natural resources, which when refined, could serve as engine for growth and development. They argue that, because of the low-income base and the high propensity to consume of the occupants of these developing countries, their levels of savings are low, which further translate to low capital formation and low productivity hence, the existence of high rate of poverty. These groups of thinkers therefore, suggested that to break this vicious circle of poverty, Foreign Direct Investment (FDI) must be encouraged to complement domestic investment so as to provide these developing countries with their desired growth and development .
Capital flows is a term used to describe the movement or flow of money as it relates to activities such as investing, trading goods and services, or the operation of a business enterprise. The term is often used to describe internal processes within a business that involve purchasing necessary
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