Measuring the Unimportance of Being Earnest

The paper argues that foreign direct investment in Africa is often driven by natural resources rather than good governance or low corruption. While countries with poor governance rankings often attract significant FDI, the author contends that sound governance is necessary for long-term resource management and sustainable economic growth.

• There is a disconnect between a country's business environment rankings and its actual ability to attract foreign direct investment (FDI). While the Doing Business 2008 report identifies Mauritius, South Africa, Namibia, Botswana, Kenya, Ghana, and Tunisia as the most lucrative environments, only Tunisia and South Africa were among the top 10 FDI destinations in Africa last year.
• High levels of corruption do not necessarily deter foreign investors, particularly when the potential returns are high. Four of the top 10 FDI destinations in Africa—Sudan, Equatorial Guinea, the Democratic Republic of the Congo, and Chad—are ranked among the bottom 10 in the Corruption Perception Index.
• Investment in Africa is frequently driven by the presence of natural resources, specifically in the energy sector, rather than the rule of law.
• While good governance may not be the primary driver for initial investment, it is critical for ensuring that national revenues are used to build the economy and for retaining investors for the long term.

APA

South African Institute of International Affairs (2008). Measuring the Unimportance of Being Earnest. https://saiia.org.za/research/measuring-the-unimportance-of-being-earnest/

Chicago

South African Institute of International Affairs. Measuring the Unimportance of Being Earnest. 2008. https://saiia.org.za/research/measuring-the-unimportance-of-being-earnest/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Measuring the Unimportance of Being Earnest |date=29 April 2008 |url=https://saiia.org.za/research/measuring-the-unimportance-of-being-earnest/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2008measuring, author = {{South African Institute of International Affairs}}, title = {{Measuring the Unimportance of Being Earnest}}, institution = {South African Institute of International Affairs}, year = {2008}, month = apr, url = {https://saiia.org.za/research/measuring-the-unimportance-of-being-earnest/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }