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sharing in governance of extractive industries

Rethinking investment incentives: a new book!

While mining and oil companies are reliant on the location of the ore or the deposit and as a result cannot move to as many jurisdictions as companies in other sectors, the size and front-loaded nature of many mining and oil investments mean that fiscal incentives granted during the early years of the project can, in some cases, make an investment project pass the necessary hurdle rate. In others, however, companies may request or governments offer incentives that are unnecessary, costly or misaligned with development priorities.

 

More generally, the use of incentives to attract investment in natural resources and other sectors is connected to and impacts the most pressing challenges facing us today, including climate change, corruption, employment, development, harmful competition, and public spending efficiency. How, when, where, and why governments use incentives to attract investment is therefore critically important to whether and how society benefits from investments and to other public policy decisions and trade-offs. It is increasingly apparent, however, that the use of incentives is not well understood—including by the policy makers who use them—which necessitates a closer look and, in many cases, a policy response.

 

In that context, the book "Rethinking Investment Incentives: Trends and Policy Options" (Columbia University Press, 2016) explores the use of incentives by governments worldwide, illustrating current trends relating to a diverse range of incentives. It also discusses current and possible future efforts at the sub-national, national, and international level to address the policy and governance challenges that are both driving, and driven by, the use of incentives. By linking economic analysis, development impacts, regulatory issues and policy options, this book is a key resource for understanding what the increasing mobility of capital means for the cities, states, nations and regions that seek to attract, direct, and retain investments.

 

As an overall conclusion, this volume suggests that careful investment policies are particularly crucial to guide the strategic and efficient mobilization of public and private resources for improved economic, social and environmental outcomes. Investment incentives may play a useful role, if they are strategically and thoughtfully designed and are based on a robust cost-benefit analysis.  While the focus of the volume is broader than extractive industries, the conclusions are especially important for resource-rich countries, whose other characteristics (including the accessibility and quality of the underlying resource, the availability of critical infrastructure and labor, and other investment determinants) are likely to be even more important for investors than most types of government incentives.

 

A 30% discount is available on the purchase of the book: View the flyer for ordering and discount information.

 

 

Investment incentives for extractive industry projects may play a useful role, if they are strategically and thoughtfully designed and are based on a robust cost-benefit analysis.

 

A 30% discount is available on the purchase of the book: View the flyer for ordering and discount information.

 

 

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