The paper assesses the importance of openness, infrastructure availability, and sound economic and political conditions in increasing developing countries' attractiveness with respect to FDI. The results show that these factors are particularly important for South Asia, Africa, and the Middle East. The paper also shows a higher impact of these factors on FDI in the manufacturing sector than on total FDI. The message to developing countries' policymakers is twofold. First, efforts towards openness should be initiated or further increased in order to make their economies attractive to foreign investors. Second, improvements in other aspects of the investment climate are important complements to openness and result in additional and sensitive increases in FDI inflows. Copyright � 2007 The Authors; Journal compilation � 2007 Blackwell Publishing Ltd.

This paper examines the growth performance of Indian States during 1970±94. We, ®rst, assess the contribution of dierences in the availability of physical, social, and economic infrastructure to growth performance. Our estimations account for reverse causality arising from the endogeneity of infrastructure investment. Then, combining principal components analysis and panel data estimation techniques, we provide more accurate estimates of the growth impact of speci®c types of infrastructure. In particular, we highlight the strong impact of primary education, health conditions, irrigation, roads and rail network, power capacities, and ®nancial development. Moreover, we do ®nd evidence of conditional convergence across States. This does not rule out persistent income inequalities due to the dispersion of steady-state income levels. Such disparities are accounted for by dierences, ®rst, in the structure of production, second, in infrastructure endowments, and, third, in State-speci®c ®xed eects in the growth regression.

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We estimate a production function that accounts for the economic performance of the country in the 20th century. We elaborate long term time series whereas most of the recent empirical studies on growth are based on cross section analysis. This approach allows us to follow the various regime changes that can be identified in the rich economic history of Argentina. To evaluate Total Factor Productivity (TFP) we initially test the classical Solow Model. We estimate the speed of convergence of TFP and obtain a non convergence result. This speed of convergence has declined since the 1930s, and we find a phenomenon of divergence in the period 1970-90. We then analyse the impact on production of additional variables recently highlighted in the endogenous growth literature such as the process of catch up of foreign technical progress, human capital and trade openness. Chow tests for this extended production function give us a strong probability of changes in the growth regimes. The estimation, that takes into consideration the break points identified, shows that the impact of trade openness and foreign technology is not stable throughout the century. In what concerns the impact of education on economic growth, we find a strong effect of primary education on growth, and a weaker effect of secondary-university education.

Argentina's economic policies since the beginning of the century, give an interesting background to the study of Real Exchange Rate (RER) management in emerging countries. In this article, four types of RER overvaluation are identified. In the 1920s, Argentina provides a short example of overvaluation in a context of a fixed exchange rate policy. Moreover, the estimations show that import substitution regimes can lead to a misalignment of RER. Argentina illustrates also the difficult management of RER in a volatile environment. The results allow, in addition, to better understand the failure of the trade liberalization attempts of the country and remind that successfully integrating the world economy asks for an appropriate RER policy.