Competition policy in the new wave of global protectionism. Prospects for preserving a fdi-friendly institutional environment

Abstract

By its very nature, competition policy has a double face vis-à-vis foreign direct investment (FDI), as it can encourage inflows into the country by ensuring a level playing field for all investors (domestic and foreign), but also be captured and misused to discourage FDI in the name of superior national interests or under pressure from lobbying groups. The worldwide emergence of “global protectionism”, in reaction to the inequalities and imbalances caused by globalization, and the impasse of supranational institutions in the governance of international relations have paved the way for the abuse of competition policy as a barrier to FDI. After giving evidence of these phenomena that threaten economic growth and welfare, the paper discusses prospects for preserving an institutional environment conducive to FDI. A desirable to-do list is outlined.