A REGIONAL ANALYSIS OF THE RELATIONSHIP BETWEEN FOREIGN INVESTMENT AND POLITICAL CONFLICT IN DEVELOPING COUNTRIES

This research investigates the association between foreign investment and political protest, political turmoil, and internal war among developing countries. Two types of relationship are analyzed. The first sees investments as leading to conflict by dampening per capita economic growth. The second treats foreign investment as creating conflict by exacerbating income inequality. A cross-national research design is used. The results show that for American states foreign investments are associated with greater inequality, which in turn is related to more internal war, and with more protest. For African states, foreign investments are negatively related to per capita growth, which is associated with more internal war, and with less protest. Asian states appear to experience few effects.