A Comparative Analysis of Latin America's Outward Investment Policies

Since the 1990s, progress made in Latin America has resulted from liberal economic reforms. This led to a free-market economy and the retreat of the State from all economic activity. Indicators such as fiscal responsibility, inward foreign direct investment and GDP per capita have reflected the positive trend in the region. Despite those results, other indicators, such as Outward Foreign Direct Investment (OFDI), highlight a different view of progress. In this matter, OFDI presents as a recent phenomenon in Latin America, and tracking its evolution should be an important element in understanding economic and political interrelations in the region. In this context, this research proposes the question of how Latin America is politically constructing their Outward Investment Policies. Using the Most Similar, Different Outcome (MSDO) filtering approach, three Latin American markets would emerge as the most representative economies regarding outward investment; Chile, Brazil and Argentina. A Process Tracing Mechanism was used from 1990 through 2015 to evaluate Outward Investment Policies (OIP) in each emerging market. Its main elements were identifying and validating the causations process and economic, political and institutional actors. A comparative exercise of the three cases will look to understand and establish the common ground on how OIP are constructed in Latin America, also its main differences. This investigation proposes a look at institutional variables which can provide in-depth insight into the interaction between political and economic actors. This research will contribute to understanding the OFDI process in Latin America. Furthermore, how cemented was the economic liberal project started in the 90s. In addition to the review of the Latin American investment regime, three components will be highlighted: first, the importance of building institutions that can underpin OIP. Second, how exposed is the region to exogenous and endogenous processes that could affect OFDI. Finally, Latin America can articulate a coordinated strategy to stimulate institutional investors within the area, producing political and economic influence beyond the regional borders.