Business Research Methods University of South Wales

Impact of governmental policies on Foreign Direct Investment: A Case of Zimbabwe

By Itai Madzivanyika

Madzivanyika Itai BS414 A1 Business Research methods

Abstract
While FDI has been a welcome development in Sub Saharan Africa in bridging the gap on
investment capital the story has been an indifferent one in Zimbabwe because the gains
realised by other neighbouring countries have not produced the same spill over effects to the
Zimbabwean economy. The purpose of this paper is to outline the role of political institution
and relevant policies determinants on FDI. This research explores the impact of government
policy on foreign direct investment in post independent Zimbabwe (1980-2015). The
research aims to use political risk rating indices as a measure of institutional policy
effectiveness. While there has been more research on non-institutional determinants of FDI
there has be less on the role played by institutional determinants such as observance of
property rights and legal systems which FDI. Priori there is a positive correlation between
high property rights index and the inward flow of FDI. Other macroeconomic, non-
institutional determinants of FDI such are the population size, human capital development,
capital intensity, and external debt to GDP ratio, infrastructural development such as road,
rail, and communication network.

Key words: Foreign Direct Investment (FDI), Political risk rating , Institutional factors, macro-
economic factors

Madzivanyika Itai BS414 A1 Business Research methods

Background Introduction

At independence in 1980 Zimbabwe inherited a highly regulated but successful economy.

The new government continued with the same path but introduced redistributive policies to
address the marginalisation of the black populace that had happened during the colonial era.
Muzurura (2015, p. 2) as cited from UNICTAD (2014) assets that the was marked growth in
the economy averaging 10.2 per cent driven by rising world metal prices, opening of trade to
export markets due to lifting of trade embargo which had previously been imposed on the
colonial regime. While there was growth there had been low inflow of FDI dating pre-
independence from Unilateral Declaration of Independence (UDI) in 1965. According to
Zwizwai, Kambudzi and Mauwa (2014) incipient droughts coupled by abortive economic
policies and highly social oriented public spending resulted in low GDP and a rising external
depth. This later resulted in Economic Structural Adjustment Programme (ESAP) in 1991 to
reverse this trend at the behest of the World Bank. The goal of ESAP was to shift from a
command economy to a market driven economy, liberalisation of foreign trade, exchange
control, pricing, monetary system and foster economic growth. Additionally the government
of the day introduced market driven interest rates, tax, tariffs and exports rebates. To
mobilise and improve the easy of attracting FDI the Zimbabwe investment Centre (ZIC) was
born. Despite all these conceited efforts ESAP was not able to address the structural deficits
in the economy instead it resulted in a rebound effect just like all other preceding economic
blueprints. The was increase in economic stability because due to market liberalisation the
economy which had aging machinery inherited from the colonial period was exposed to
competition resulting in local companies dwindling fortunes. Muzurura (2014, p.2) as cited
from WB (2012) asserts that there was also perception from the general populace that the
ESAP programme was a donor influenced package. The ZIC shifted from the original
intention of being a one stop shop but became a government tool for filtering investors who
were incongruent to the governmental policies. According to Gwenhamo (2009, p.5)
Cheaper imports from neighbouring South Africa, Botswana and increase of Chinese
investment resulted in the downward spiral of the economy. The government of the day
reverted to the interventionist approach witnessed from its early rule. Willing buyer willing
seller policy on land acquisition agreed during the Lancaster House constitution was
abandoned fast track land expropriation which resulted in disastrous consequences.
Agricultural production declined to all time low, increased money supply fuelled inflation, low
lines of credit resulted in budget deficits and decline in the provision of basic services such
as education, health care and availability of food staffs. The external debt increased to 6
Billion in 2011 with inflation rising to 231 million percent by 2008 resulting in the ditching of
local currency in favour of dollarisation in February 2009 as cited by Muzurura(2015, p.3)

Madzivanyika Itai BS414 A1 Business Research methods

from WB(2012). Against this background the study of institutional determinants of FDI in
Zimbabwe presents an interesting topic, there has been policy inconsistency as witnessed
by abortive policies and interventionist approach to redress ill implemented and advised
policies.

Overview of FDI inflow in Zimbabwe Post Independence era

FDI has always been the capital of choice in many developing nations in Sub Saharan Africa
(SSA). Despite neighbouring countries benefitting from this capital injection Zimbabwe’s
story is alarming considering it has natural resource endowments, low cost labour force,
highly trained human resources. According to UNICTAD (2015) there has been an upsurge
in FDI to Southern Africa, with neighbouring South Africa Zambia, Botswana and
Mozambique racking 51.84 billion, 14.05billion, 5.09 billion and 26.99billion respectively over
the past decade (2005-2015). Zimbabwe has only managed to attract 2.54 billion for the past
decade a pale shadow considering the higher human capital resource compared
neighbouring Mozambique for a country which is not at war like Libya, Central African
Republic and Burundi.

The government of the day has always been trying to put measures in place but never
getting the real deal. After the lapse of the 10 year period of independence Zimbabwe had to
adjust its economic blueprint to curtail the downward spiral due to social spending and
improve investment inflows. Economic structural Adjustment Programme (ESAP) was
introduced in 1990 on advice from the World Bank. Inflows reached an all-time high of 444
million since independence. However the trend has not been sustained on the upturn of the
new century. Inflows declined to a low of 3.8million in 2001 and 2003 steadily rising from
2009 to date as deduced from UNICTAD (2017). Zimbabwe’s ranking on the world rankings
of the Ease to do Business has been appalling ranked 161 out of 190 countries as
articulated on Doing business 2017. The Financial Express (2015) wrote that the Vice
President admitting that Zimbabwe has to improve on the Ease of doing Business if she was
to realise the boon that comes from FDIs.

Madzivanyika Itai BS414 A1 Business Research methods

 FDI INFLOWS
600

500

400
MILLIONS US$

300

200

100

0
80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14
1 9 19 1 9 19 1 9 19 1 9 19 19 19 20 2 0 20 2 0 20 2 0 20 2 0

Figure 1 Source: Own Computation

Since the past decade (2006 to 2015), investment has averaged only 17% of GDP
whereas an investment rate of at least 30% of GDP is needed for economic growth
according to statistics from UNICTAD (2015). FDI decision are based on natural
resource endowments, infrastructural development, population and therefore potential
market size, human capital development, banking system, institutional policies like as
measured by political stability, ability to repatriate profits, ease of doing business.
According to Muzurura (2015, p.4) and Sikwila (2014, p.2) the low FDI attraction
performances in Zimbabwe are not consistent with the country’s potential, human capital
development and its vast natural resource endowments which are mature for exploitation
by resource-seeking investors.
This paper seeks to explore if institutional factors as identified using the Political
Resource Survey Group are contributory to the low FDIs inflows over and above the
macroeconomic factors that have usually been explored form previous studies by
Gwenhamo (2008), Anyanwu (2011) Sikwila (2015), Frimpong and Oteng-Abyie (2006);
Chinyere and Ugochukwu (2013) Ahiawodzi and Tsorhe (2013), Manda (2014), Busse
and Hekener (2005)
The study seeks answers to the following questions: What is the impact government
policy on FDI inflows into Zimbabwe? What policy factors matter most in boosting FDI
inflows to Zimbabwe? The study is significant given Zimbabwe’s low FDI inflows
compared to regional neighbours, low share of world trade, unpredictable foreign aid
inflows and erratic economic performance. FDI inflows offer the only tangible channel to
stimulate economic growth and improve Zimbabwe living standards given its ability to

Madzivanyika Itai BS414 A1 Business Research methods

bridge the gap on development budgetary deficits, reduce technological gap, and
improve productivity, employment creation, improving the GDP hence living standards
as supported by Busse and Hefeker (2005) and Dao (2013, p. 709). FDI also plays the
pivotal roles of filling in domestic savings, foreign exchange, export returns, and tax
revenue gaps as postulated by Busee and Hefeker (2005) and Muzurura (2014, p.5).
Whilst most studies on FDI in Africa concentrate on macroeconomic determinants of FDI
(see Sikwila, 2015 and Muzurura 2015) this study focuses only institutional determinants
of FDI inflows into Zimbabwe. The article is made up of five sections: section one is the
introduction on FDI in Zimbabwe. Section two covers theoretical consideration and
empirical literature; Section three presents the methodological framework. Section four is
for findings and discussions whilst section five is concerned with the conclusions and
recommendation.

Madzivanyika Itai BS414 A1 Business Research methods

Literature Review:
Studies on FDI inflows in developing countries have been determined by pull and push
factors as concurred by Busse and Hefeker (2005), Bénassy‐Quéré, Coupet and Mayer
(2005), Gwenhamo (2009), and Muzurura (2015). The quality of institutions have been
attributed to the mixed blessings from FDI. Most of the pull factors are endogenous to the
Multinational Company (MNC) investor such as firm size, external competiveness, low
interest rate in the host country and favourable political environment. Similar research on
FDI worldwide by Wei (2000), Walsh and Yu (2010) have showed that FDI inflow has a
positive correlation economic growth as measured by gross national income per capita
(GNI), negative correlation with inflation, positive correlation with population size and
negative correlation with political instability which has been affirmed by most research work
on FDI as deduced from Gwenhamo (2009) and Busse and Hekener (2005). They all agree
that lack of policy fundamentals cannot be replaced by government incentives such as tax
rebates, tax holidays and subsidies on imports of capital goods with the OECD checklist on
FDI(2003) also affirming that these are supplementary to the economic and political
fundamentals principles needed for creating an enabling environment for business growth.

Whilst most governance issues have been known to many African governments there has
been lack of political will to implement measures that are beneficial to the populace which
the institutions operate, resultantly the role of political fundamentals in attracting FDI cannot
be underestimated. Verwey (2007) “The political environment act like a cushion in which the
economy swim”

Madzivanyika Itai BS414 A1 Business Research methods

Methodology

Data over the post independent period in Zimbabwe was downloaded from the United
Nations Cooperation (UNICTAD 2015) for trade and development website. Property rights
indices and time series data extracted for the purpose of this exploratory study. This
research is there to explain the impact of government policy on inward Foreign Direct
Investment (FDI) flow using the case of Zimbabwe. For this topic I hope to use secondary
qualitative and quantitative data available from government’s statistical information, World
Bank statistics, Organisation for Economic Co-operation and Development (OECD)
information, professional as well academic data. Secondary validated data will come in
handy and relevant to my research. It is readily available and accessible electronically on
internet resources so is easy to compare from a wealthy of resources.

The analysis comprises the period 1980 to 2015 on GNI and political risk rating from 1996 to
2015 with the data from 1996 being collected on 2 yearly intervals and the yearly from
2000.on Zimbabwe. Data is also collected from Doing Business for comparison of Zimbabwe
with its neighbours of which the linkage between political institutions and FDI is of particular
concern (see Appendix C Doing business ranking and indices).
Information on political risk and institutions are taken from the International Country Risk
Guide (ICRG), provided by the Political Risk Services (PRS) Group. Publicly available data
on the summarised data from the World Bank website is used for the analysis. The
summarised country risk rating indicators as defined by the PRS Group the indicators do not
only rate political risk, but also various components of political institutions. They are defined
as follows according to World Bank (2015). The PRS prefix on each code referring to the
Political and Risk Services Group who pioneered the study in 1984.
• Political Stability and Absence of Violence is the combined effect of Government
stability, internal and external conflict and the effects of ethnic tensions. The
combined effect has a code PRSPV. Government stability measures the
government’s adherence to carry out its policies and to stay in power.
• SOCIO measures socio-economic pressures arising in society that restrain
government action or raises social disgruntlement that destabilises the political
regime. Incorporated in the combined effect PRSPV
• INVEST coded PRSRQ stands for the risks on an investment profile such as
inability to repatriate profits, expropriation delays in payments which are not
covered by the risk financing or offset through an economic means.
• ICONFL stands for internal conflict, measuring political violence within the
country which can take the form of civil war, terrorism, political violence or civil

Madzivanyika Itai BS414 A1 Business Research methods

 disorder and its actual or potential impact on governance. Denoted by combined
effect PRSPV.
• ECONFL weighs external conflict, namely the risk to the incumbent government
from foreign action, ranging from non-violent external pressure, such as
diplomatic pressures, withholding aid or trade sanctions, to violent external
pressures, ranging from cross border conflicts to all-out war. Denoted by
combined effect PRSPV.
• The effect of ETHNIC tensions is incorporated in combined code PRS PV
assesses the degree of tensions among ethnic groups attributable to racial,
nationality or language divisions, common in Africa because of fragmented
minority groups in the same nation or area.
• RELIG measures religious tensions, stemming from the domination of society
and/or governance by a single religious group seeking, for instance, to replace
civil by religious law or to exclude other religions from the political and social
process. Common amongst radicalised religions. Coded as PRSPV.
• CORR assesses the level of corruption. Denoted by code PRSCC.
• MILIT represents the influence of the military in politics, which could signal that
then government is unable to function effectively and that the country might have
an unfavourable environment for business. Coded on combined code as PRSVA.
• LAW Coded as PRSRL. Measures the rule of law and presence of order, i.e., the
ability to prosecute and unbiased the legal system.
• DEMOC relates to the democratic accountability of the government, that is, the
ability of the government to perform the mandate they were elected for by the
citizens but also to fundamental civil freedom and political rights. It is denoted on
the summarised table by PRSVA in this case denoting the combined effect of
military in politics and democratic accountability of the government to the
citizenry.
• BUR stands for the institutional strength and quality of the bureaucracy, which
might act as a shock absorber tending to reduce policy revisions if governments
change. PRSGE measuring the bureaucracy quality of the government.

Each indicator is assessed on a scale from 0 to 12, with higher values indicating less political
risk and better institutions. The World Bank data (2015) uses rating data with scale 1 to 6. As
depicted on appendix C. According to Busse and Hekener (2005), these indicators are
widely recognised as high-quality measures of political risk and institutions. From World
Bank (2005) analysis on the combined formulated data all the summarised political risk
factors are mostly positively related to each other as they all assess political risk and

Madzivanyika Itai BS414 A1 Business Research methods

institutions from different points of view. For instance the combined effect of government
stability, internal conflict and external effect as denoted by PRSVA is partially correlated to
regulatory quality (PRSRQ) and rule of law (PRSRL) with partial correlations 0.54 and 0.37
respectively. Similarly control of crime and corruption is positively correlated to regulatory
environment quality by a correlation of 0.75. Moreover most of the political risk factors are
strongly positively correlated to Gross National Income per capita. Contradictory results on
coming from rule of law and political stability and absence of violence which can be ignored
since studies form large samples of country data in Sub Saharan Africa have shown positive
correlations as asserted by WTO (2014) and Chakrabrati (2001)

Table 1 Correlation Matrix logGNI and Political risk indicators

  log GNI PRSVA PRSPV PRSGE PRSRQ PRSRL PRSCC

log GNI 1

PRSVA 0.520104 1

PRSPV -0.02533 0.354355 1

PRSGE 0.574546 0.714035 0.198743 1

PRSRQ 0.7424 0.537988 0.22255 0.49552 1

PRSRL -0.09844 0.367475 0.72036 -0.00964 0.28691 1

PRSCC 0.664126 0.702784 0.513617 0.632183 0.746924 0.511788 1

In many of the previous exploratory studies on FDI by Sikwila (2015), Muzururura (2015),
Dao (2013); Akwaowo 2013), Walsh and Jianyang (2010), Gwenhamo (2009), Busse and
Hekener (2005) Chakrabarti (2001) and Wei (2000) population size, political risk indicators,
Gross Domestic Product or Gross national income, Inflation, trade are mostly the factors
used to explain the impact of FDI. Using per capita figures takes into account population
size. Regarding the independent variables of foreign investment, a standard procedure
would be to use a common theoretical model for the determinants of FDI flows, integrate
political risk indicators and then estimate the effects. A statistical regression model can be
used to infer the behaviour of FDI due to varying macro-economic and political institution
indicators.
Market size, economic performance measured as Gross Domestic Product (GDP) or Gross
National Income (GNI) per capita, is probably the most important factor in explaining foreign
investment according to Busse and Hekener (2005). Market size plays a big role for
horizontal FDI (market seeking investment). According to Carkovic and Levine, (2002) high

Madzivanyika Itai BS414 A1 Business Research methods

(GDP or GNI) growth rates indicate the purchasing power in the market which may signal
high investment returns which are attractive to MNC. However endogeneity may arise since
high incomes may be boosted by FDI inflows (Gwenhamo et al 2009).

Openness to trade is another determinant of FDI. It is usually measured by the ratio of

imports and exports to GDP. This ratio is quantifies trade restrictions. In general, the impact
of openness to trade is linked to the type of foreign investment (Asiedu, 2002). Horizontal
FDI may be attracted by highly regulated market since they protect the MNC from
competitors while open market favour vertically expanding MNC which reduce trade barriers
since trade barriers increase cost of production, are an indicator of market imperfections
such as exchange controls which limit the ability to repatriate profits.
X
The empirical linkages between political risk, institutions, Growth, inflation and GNI can be
deducted from the following equation on FDI flows.

log FDIi = ß0 + ß1 log GNIi + ß2 GROWTHi + ß3 log TRADEi + ß4 log INFLATIONi

+ ß5 POLITICALi + ei (i)

Where ßj are the estimated parameters coefficients and the parameters stand for
1. GNIi, -Gross National Income per Capita current international in USD
2. GROWTHi- for market growth and potential
3. TRADEi- to control the openness of trade
4. INFLATIONi as a proxy for macroeconomic distortions
5. POLITICALi stands for indicators for political risk and institutions,
6. ei is an error term.

Gross National income, market growth and Trade are expected to be positively correlated to
Foreign Direct Investment inflows whereas for INFLATION we would assume a negative
linkage as asserted by Busse and Hekener (2005). Favourable policies would have a
positive linkage to FDI

Madzivanyika Itai BS414 A1 Business Research methods

Data analysis

Table 2 Regression Analysis Log GNI as Proxy for FDI

Regression Statistics
Multiple R 0.897770877
R Square 0.805992547
Adjusted R Square 0.689588075
Standard Error 0.041590697
Observations 17

ANOVA
  df SS MS F Significance F
Regression 6 0.071862943 0.011977157 6.92406859 0.004060688
Residual 10 0.01729786 0.001729786
Total 16 0.089160804      

  Coefficients Standard Error t Stat P-value Lower 95% Upper 95%

Intercept 3.283882792 0.140265538 23.41190029 4.5787E-10 2.971351697 3.596413887
0.42238437
PRSVA 0.194258809 0.232213544 0.83655245 4 -0.323145211 0.71166283
0.72467153
PRSPV -0.086535856 0.238855202 -0.362294206 4 -0.618738413 0.445666701
0.48978407
PRSGE -0.13953708 0.194613307 -0.716996604 9 -0.573162551 0.294088391
0.09180569
PRSRQ 0.234966073 0.126008277 1.864687604 9 -0.045797866 0.515730012
0.04701111
PRSRL -0.271730694 0.119998084 -2.264458615 7 -0.539103086 -0.004358302
0.05423270
PRSCC 0.357113385 0.163803005 2.180139394 9 -0.007862456 0.722089225

From the regression analysis there is a positive correlation between political risk indicators
and Gross national income (GNI) which in this case is being used as a proxy for FDI. This
implies the political institutions have a big role to play as far as creating a conducive
environment for enabling business growth. As highlighted from OECD (2003) policy
measures cannot be substituted incentives on Foreign Direct Investment as has been the
order of the day in Zimbabwe. Economic blueprints have been overridden for political
expediency as concurred by Zwizwai, Kambudzi and Mauwa (2014). Government
institutions have a role of crafting policies that are lure the investor. Not only are the policies
internally acceptable but follow the world leading practices. From statistics from the Doing
Business 2017 the Zimbabwean score and ranking has been appalling while the powers that
be accept that there need for alignment the political will has been lacking as historically
witnessed from abortive politics and interventionist policies which result in capital flight

Madzivanyika Itai BS414 A1 Business Research methods

 From the table 3 below there is an issue of multi-collinearity between FDI and GNI since the
correlation between the 2 variables is greater than 0.8, 0.92 in this case. This implies the
regression model need to be improved upon if it is used as a predictive tool

Table 3: Correlation Matrix log FDI and FDI explanatory Variables

  Log FDI log GNI Growth log Inflation Political Log Trade
Log FDI 1
log GNI 0.917690002 1
Growth -0.30182439 -0.58906006 1
log Inflation -0.84886564 -0.82735996 0.35679 1
Political 0.513728898 0.660520567 -0.78245 -0.579769804 1
Log Trade 0.182051799 -0.184893937 0.81656 -0.111776281 -0.541850837 1

Madzivanyika Itai BS414 A1 Business Research methods

Conclusion

Foreign Direct Investments are desirable for economic growth since they have spill over
effects such as bringing in foreign exchange, technology transfer, human capital
development through skills transfer and development, provide taxes to host countries, they
are less susceptible to crises and sudden stops. While these benefits can be realised to host
countries it is the business environment which have a pull effect on Multi-National
Companies (MNCs). Despite the Multinational Companies being able to influence policy
change the host governments have to create have a bigger role to play it creating a
conducive policy framework which have a pull effect on the MNCs However it is political risk
which is a source of concern which is deterrent to the investor as pointed out through this
min explanatory study. Time series data available from 1996 to 2015 derived from World
Bank summary data displayed that political risk plays a crucial role in attracting FDI.
Inference using a simple statistically model pointed out the effect of the rule of the law
respect of property rights, observance of civil and political rights, absence of internal and
external conflict, absence of radicalism emanating from religious groups are pivotal to
attracting FDI. Macroeconomic issues such as the GDP or GNI ratio, inflation and trade
openness play a pivotal role in enhancing a host country’s competitiveness as an invest
destination. This therefore calls for the political leadership to be aligned with the universally
recognised policy fundamentals impacting FDI. The government of Zimbabwe have to
display maturity to end the cyclic process which has been displayed since independence
which has been a turn off to MNC.

Madzivanyika Itai BS414 A1 Business Research methods

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Madzivanyika Itai BS414 A1 Business Research methods

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26. UNICTAD (2017) ‘Foreign direct investment: Inward and outward flows and stock, annual,
1970-2015’ [Online] Available at
http://unctadstat.unctad.org/CountryProfile/GeneralProfile/enGB/716/GeneralProfile16.pdf
(Accessed 10 May 2017)
27. Verwey, I. 2007. ‘Success Factors of Women Entrepreneurs in Construction. Development
Bank of Southern Africa.’ [Online]. Available at: <http://www.irbnet.de/>. (Accessed 21 Jan
2017)
28. Walsh, J. P. and Jiangyan,Y (2010) ‘Determinants of Foreign Direct Investment: A Sectoral
and Institutional Approach’ [Online] Available at
:https://www.imf.org/external/pubs/ft/wp/2010/wp10187.pdf( Accessed 17 May 2017)
29. Wei, Shang-Jin (2000), How Taxing is Corruption on International Investors?, Review of
Economics and Statistics, Vol. 82, No. 1, pp. 1-11. [Online] Available at
:https://www.google.co.zw/?
gws_rd=cr&ei=ZpgdWYWfOMTWwAKCvrHgDA#q=international+country+risk+guide
(Accessed 18 may 2017)
30. World Bank (2014). ‘The World Development Indicators 2014’[Online] Available
at:https://openknowledge.worldbank.org/bitstream/handle/10986/.../9780821399859.pdf
(Accessed 20 May 2017)
31. Zwizwai, B. , Kambudzi, A and Mauwa B.(2014) ‘Zimbabwe: Economic Policy-Making and
Implementation: A Study of Strategic Trade and Selective Industrial Policies’

Madzivanyika Itai BS414 A1 Business Research methods

Table 4: Description of Critical terms
Variable Definition Source
FDI Foreign direct investment per capita, net inflows in current in US World Bank (2017)
dollars
GNI Gross National Income per capita, PPP current international World Bank (2017)
US dollars
GROWTH Real growth of Gross National Income per capita in per World Bank (2017)
cent
TRADE Total imports and exports divided by Gross Domestic World Bank (2017)
Product
INFLATION Change in GDP Deflator in per cent World Bank (2017)
GOVST Government stability World Bank (2017)
SOCIO Socio-economic conditions World Bank (2017)
INVEST Investment profile World Bank (2017)
CONFL I Internal conflict World Bank (2017)
ECONFL External conflict World Bank (2017)
CORR Level of corruption World Bank (2017)
MILIT Influence of military in politics World Bank (2017)
RELIG Tensions among religious groups World Bank (2017)
LAW Law and order World Bank (2017)
ETHNIC Tensions among ethnic groups World Bank (2017)
DEMOC Democratic accountability of the government World Bank (2017)
BUR Institutional strength and quality of the bureaucracy World Bank (2017)

Figure 2 How Zimbabwe and comparator economies rank on the ease of doing business

Source: Doing Business 2017

Table 5 : Sample Data

log GNI PRSVA PRSPV PRSGE PRSRQ PRSRL PRSCC

Madzivanyika Itai BS414 A1 Business Research methods

3.271842 0.58 0.78 0.75 0.27 0.67 0.50

3.283301 0.50 0.64 0.50 0.45 0.67 0.33

3.276462 0.50 0.53 0.50 0.09 0.33 0.17

3.257679 0.33 0.44 0.50 0.14 0.08 0.00

3.184691 0.33 0.61 0.50 0.05 0.08 0.00

3.161368 0.33 0.63 0.50 0.05 0.50 0.00

3.146128 0.42 0.68 0.38 0.05 0.50 0.00

3.136721 0.42 0.67 0.38 0.00 0.50 0.00

3.120574 0.38 0.60 0.38 0.00 0.50 0.00

3.021189 0.33 0.61 0.38 0.00 0.50 0.00

3.075547 0.33 0.62 0.38 0.00 0.50 0.00

3.10721 0.33 0.61 0.38 0.00 0.50 0.08

3.146128 0.33 0.63 0.38 0.00 0.50 0.08

3.190332 0.33 0.63 0.38 0.00 0.50 0.17

3.206826 0.33 0.68 0.38 0.14 0.50 0.17

3.220108 0.33 0.64 0.38 0.14 0.50 0.17

3.232996 0.33 0.66 0.38 0.27 0.50 0.17

Source: UNICTAD 2017

Madzivanyika Itai BS414 A1 Business Research methods

 Political Risk Services International Country Risk Guide (PRS)
Data Provider Political Risk Services
Description Commercial business information p rovider headquartered in Sy racuse, United States
Website www.p rsgroup .com
Data S ource International Country Risk Guide
Type Exp ert assessments subject to p eer review at the topic and regional levels
Respondents Political Risk Services staff
Frequency M onthly since 1984
Coverage Global samp le of countries
Public Access Full dataset is commercially available. Averages of sub-indicators are p ublicly available in
this sp readsheet.
Description The International Country Risk Guide includes a Political Risk Index, which in turn consists of 12 comp onents measuring various dimensions of the p olitical and business environment facing firms op erating in a
country . We use data from December rep orts of each y ear.

2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2000 1998 1996
Voice and Accountability
Military in politics X X X X X X X X X X X X X X X X X
Democratic accountability X X X X X X X X X X X X X X X X X

Political Stability and Absence of Violence

Government stability X X X X X X X X X X X X X X X X X
Internal conflict X X X X X X X X X X X X X X X X X
External conf lict X X X X X X X X X X X X X X X X X
Ethnic tensions X X X X X X X X X X X X X X X X X

Government Effectiveness
Bureaucratic quality X X X X X X X X X X X X X X X X X

Regulatory Quality
Investment prof ile X X X X X X X X X X X X X X X X X

Rule of Law
Law and order X X X X X X X X X X X X X X X X X

Control of Corruption
Corruption X X X X X X X X X X X X X X X X X

Country Coverage 140 140 140 140 140 140 140 140 140 140 140 140 140 140 140 140 129
Year of publication 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2000 1998 1996

Source: World Bank 201

Madzivanyika Itai BS414 A1 Business Research methods