Abstract
An important factor shaping the regulatory framework and influencing the effectiveness of legal regulation of FDI is the nature of the institutions which have the power to deal with the area in question.1 An analysis of recent legal studies on foreign investment in the former USSR indicates that commentators perceive the ongoing process of transition to be a constant variable, in that they assume that the overall pattern of the present socioeconomic transformations — the transition — is a forward-oriented progressive process, one which presumably departs from the totalitarian past to a system which resembles western democracies. Furthermore, they tend to view the state in this process as a monolithic entity which is becoming, in a Weberian sense, ‘rational’.2 Thus, in the analysis of legal phenomena, this analytical unit — the state itself, which predetermines the overall direction of transition — is treated as an exogenous phenomenon. This chapter will employ an approach according to which this phenomenon will be treated as being endogenous. More specifically, we will suggest that the state — through processes of internal restructuring — can cause the regression of the transitional process and, accordingly, may impede the achievement of the optimal equlibrium of FDI regulation.
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Notes
B.R. Cheffins, Company Law: Theory, Structure and Operation (1997) 213.
See J.J.A. Burke, ‘The Economic Basis of Law as Demonstrated by the Reformation of NIS Legal Systems’ (1996) 18 Loyola of Los Angeles International and Comparative Law Journal 207.
Barkey defines: ‘The state can be said to be autonomous when it acts in opposition to the stated interests of the dominant classes.’ See H.J. Barkey, ‘State Autonomy and the Crisis of Import Substitution’ (1989) 22 (3) Comparative Political Studies 293, 296;
Hamilton, in turn, defines three distinct manifestations of this autonomy: (i) when the state pursues specific ‘state ends’; (ii) when the state acts independently of dominant class interference; and (iii) when the state ‘for ends opposed to the actual or perceived interests of the dominant class’ See N. Hamilton, The Limits of State Autonomy: Post-Revolutionary Mexico (1982) 12.
Y. Chu, ‘State Structure and Economic Adjustment of the East Asian Newly Industrializing Countries’ (1989) 43 (4) International Organization 647, 657.
See P. Katzenstein, Between Power and Plenty: Foreign Economic Policies of Advanced Industrial States (1978);
P. Katzenstein, Small States in World Markets: Industrial Policy in Europe (1985).
D. Okimoto, Between MITI and the Market (1989) 18.
K. Fields, ‘Strong States and Business Organizations in Korea and Taiwan’ in S. Maxfield and B. Schneider (eds), Business and the State in Developing Countries (1997) 131–51.
P.B. Evans, Embedded Autonomy: States and Industrial Transformation (1995).
See A. Amsden, ‘A Theory of Government Intervention in Late Industrialization’ in L. Putterman and D. Rueschhemeyer (eds), State and the Market in Development: Synergy or Rivalry? (1992);
E. Keep and K. Mayhew, ‘Towards a Learning Society — Definition and Measurement’ (1996) 17 (3) Policy Studies 215.
T.W. Waelde and J.L. Gunderson, ‘Legislative Reform in Transition Economies: Western Transplants — A Short-Cut to Social Market Economy Status?’ (1994) 43 The International and Comparative Law Quarterly 347, 377.
L.M. Friedman, The Legal System: a Social Science Perspective (1975) 149.
Sawer defines ‘interests’ as ‘a claim actually advanced by defined individuals or groups, and considered and dealt with by defined law-makers and courts’. See G. Sawer, Law in Society (1965) 150.
See J.M. Black, Rules and Regulators (1997).
A. Lijphart, Democracies: Patterns of Majoritarian and Consensus Government in Twenty-One Countries (1984).
J.S. Hellman, ‘Constitutions and Economic Reform in the Post-Communist Transitions’ in J.D. Sachs and K. Pistor (eds), The Rule of Law and Economic Reform in Russia (1997) 55–79, 73.
Barkey provides plausible arguments to prove the direct causal relationship between the state lacking autonomy and the policy of import-substituting industrialization. See H.J. Barkey, ‘State Autonomy and the Crisis of Import Substitution’ (1989) 22 (3) Comparative Political Studies 291.
This was cynically commented on by the president himself at the press conference after the final results of the elections were announced. He stated: ‘Do you remember the headlines when turnout was 99,99 per cent in favour? Well, you could say that we have allowed democracy to progress by 20 per cent’. Cited in ‘Nazarbayev Re-elected in “Unfair” Vote’ Combined Reports by Reuters/Associated Press, 12 January 1999 and in C. Gall, ‘Smug Rulers Play for Keeps in Kazakhstan’ The Moscow Times, 15 January 1999.
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© 2002 E.K. Dosmukhamedov
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Dosmukhamedov, E.K. (2002). The State as the Regulator of FDI. In: Foreign Direct Investment in Kazakhstan. St Antony’s Series. Palgrave Macmillan, London. https://doi.org/10.1057/9780230502178_8
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DOI: https://doi.org/10.1057/9780230502178_8
Publisher Name: Palgrave Macmillan, London
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