Measuring the Unimportance of Being Earnest

This research paper examines the relationship between governance, corruption, and foreign direct investment (FDI) in Africa, arguing that while good governance may not be the primary driver for short-term investment—particularly in resource-rich nations—it is essential for long-term economic stability and resource management.

• Analysis of the World Bank's Doing Business 2008 report and Transparency International's Corruption Perception Index suggests that a positive business climate and low corruption are not guaranteed drivers of increased foreign direct investment (FDI) in Africa. While Mauritius, South Africa, Namibia, Botswana, Kenya, Ghana, and Tunisia were identified as lucrative environments, only South Africa and Tunisia were among the top 10 FDI destinations last year.
• High levels of corruption do not necessarily deter investment, as evidenced by the fact that four of the top 10 African FDI destinations—Sudan, Equatorial Guinea, the Democratic Republic of the Congo, and Chad—are ranked among the bottom 10 in terms of corruption.
• Investment in Africa is frequently driven by the presence of natural resources, specifically in the energy sector, rather than the rule of law. Some investors prioritize a favorable loss-return ratio over governance concerns, viewing bribes as a manageable cost.
• Although good governance may not attract initial short-term investment, it is critical for retaining investors, ensuring the proper use of national revenues, and building a sustainable economy from within. The African Peer Review Mechanism (APRM) is cited as a necessary tool for nation-building, even if it is not a primary concern for businesses.

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} }