This study is the result of research undertaken by the Netherlands Economic Institute, Division Balanced International Growth, Rotterdam, under the auspices of the O.E.C.D. Development Centre. In the division of labour agreed with professor Grant L. Reuber, who directed a parallel study under the auspices of the Centre' , the N.E.I. research deals with the evaluation of economic effects of private foreign investment in developing countries. The effects studied are confined to macro-economic effects which are quantifi able. The lack of a satisfactory methodology for the assessment of these effects seemed to justify this limitation in the approach to the evaluation of private foreign investment. The study is organized as follows. Part I reviews briefly and critically the literature about the evaluation of private foreign investment and suggests the need for an appropriate macro-economic methodology. Part II develops the principles and techniques for such a methodology which is applied empirical ly to data for five developing countries in Part III. While Parts II and III are concerned with the effects of aggregated volumes of private foreign invest of the previous parts, the appraisal of ment, Part IV considers, independently projects financed through foreign investment and discusses the special fea tures of social benefit-cost analysis of such projects.

Inhalt
I Evaluation of Private Foreign Investment-A Critical Survey of Current Approaches.- I. General Introduction.- II. Problems in and Criteria for Evaluating the Impact of PFI.- III. The Contribution to GNP.- IV. The Balance of Payments Effect of PFI.- V. Issues Concerning Other Effects of PFI.- VI. The UNCTAD Study on PFI.- II A Macro-Economic Methodology for the Appraisal of the Effects of Private Foreign Investments in Less Developed Countries.- Summary of Part II.- I. General Introduction.- II. A Model of a LDC's Economy with Special Reference to PFI.- III. The Economic Effects of PFI.- IV. Other Economic Effects of PFI not Considered by the Model.- V. The Interdependence Simultaneous and Over Time of the Effects of PFI.- VI. The 'Cumulative' Effects of PFI.- VII. The 'Marginal' Effects of PFI.- VIII. Cumulative and Marginal Effects Compared.- IX. Sectoral Disaggregation and Input-Output Analysis.- X. Various Practical Situations and the Use of the Model.- XI. The Use of the Model for Decision Making.- XII. The Use of the Model for Empirical Investigations.- XIII. Evaluation and Conclusions.- List of References.- III Empirical Application of the Macro-Economic Methodology.- I. General Introduction.- II. The Choice of Countries.- III. The Main Modifications Introduced.- IV. Estimation of the Parameters and Solving Procedure.- V. India.- VI. The Philippines.- VII. Ghana.- VIII. Guatemala.- IX. Argentina.- X. A General Comparison of the Empirical Outcomes.- XI Alternative Assumptions About Import Substitutions.- XII. General Conclusions on the Empirical Application on the Methodology.- IV The Appraisal of Private Foreign Investment Projects A Social Cost-Benefit Approach.- I. Introduction.- II. Principles of Social Cost-Benefit Analysis.- III. BasicCharacteristics of Private Foreign Investment Projects as Distinct from Domestic Investment Projects.- IV. The Impact of the Special Characteristics of Private Foreign Investment on the Methodology of Social Cost-Benefit Analysis.- V. Outline of a Social Benefit-Cost Scheme for Appraising Private Foreign Investment Proposals.- VI. Some Refinements and Complications.- VII. Social Cost-Benefit Analysis as a Tool in Negotiating With Foreign Firms.- Author Index.