Foreign Direct Investment and Human Development: zooming on the case of Africa

Abstract

The purpose of this paper is to explore the effects of foreign direct investment on the human development dimension (measured by the Human Development Index), with a focus on the African region. The investigation shows that a positive link between the two dimensions exists but requires the implementation of specific behaviours to be established, both on the host country and on the investor’s part. Once provided a set of policy recommendations for both actors, the thesis provides a case-study, Ethiopia, in which the presence of these positive behaviours is investigated. Results indicate that the foreign direct investment’s contribution to the enhancement of the human development in the country is mainly driven by economic considerations, with a slight exemption for the investments coming from China.