The role of foreign direct investment (FDI) in promoting access to clean water

Jessica Neafie

doi:10.22151/politikon.39.1

Authors

Jessica Neafie University of Oregon

DOI:

https://doi.org/10.22151/politikon.39.1

Keywords:

developing countries, development, foreign direct investment, globalization, international political economy, natural resources, water

Abstract

Does foreign direct investment (FDI) decrease access to clean water in developing nations? Governments use economic growth from globalization to fund investment in infrastructure to improve water access, but FDI is hindering these efforts through pollution and increased water usage that put pressure on the supply of this public good. I test the hypothesis that growing pressure from increased use and pollution of water by foreign investors reduces water access in developing countries, where impacts are felt more acutely than in developed countries where public goods institutions are stronger. Using a country-year fixed effects regression model on a panel data set of over 130 countries from 1990 to 2010, I assess whether FDI increases or decreases potable water access in developing countries, and the role that development plays in moderating this effect. I find strong evidence of a negative relationship between FDI and access to potable water in developing countries.

Author Biography

Jessica Neafie, University of Oregon

Jessica Neafie from the United States, is a PhD candidate who received her Bachelor’s degree in Asian Studies from the University of Florida. She received an MA in Diplomatic studies from the University of Westminster (London, England), and an MA in Climate Science and Policy at Columbia University (New York City). She currently studies International Relations at the University of Oregon. Her interests include globalization, Chinese politics, foreign investment, development studies, and natural resources. Her Master’s thesis on globalization and water won the award for best graduate student paper in the Environmental Studies Section at the International Studies Association Conference in 2016.