BANGLADESH INSTITUTE OF INTERNATIONAL AND STRATEGIC STUDIES

IS FOREIGN CAPITAL A VIABLE OPTION FOR DEVELOPMENT IN DEVELOPING ECONOMIES?

Author: Ishtiaque Selim

DOI Link: https://www.doi.org/10.56888/BIISSj2010v31n4a4

ABSTRACT

Traditional economic theories and models have contested in favour of foreign capital fordevelopingand less developing economies. Typically,low saving rate in the underdeveloped regions accumulating less capital generally inspires these theories and models. Hence, liberalisation of the capital accountin order to attract foreign capital has become a dominant development strategy for developing countries. However, the inflow of foreign capital hasits costs givingrise to a pertinent question: isforeign a viable option for development for the developing countries?The article seeks to address this query. To this end, it looks into a number of research works, empirical studiesand investigation on the viability of foreign capital on the development front in less developed economies. The articleconcludesthat foreign capital’s role in development is quite contentious.