>Or put another way, since returns on investment in the "First World" is
>so much greater than investment in the "third world," why is there any
>investment whatever in the latter. Why do _some_ capitalist firms invest
>in those areas that offer lower returns?
Hope springs eternal?
There's a lot of investment in some Third World countries, like China and Mexico. But aside from oil-producing countries like Nigeria, there's almost no FDI in Africa, or the poorer regions of South Asia and Latin America. So there's very little investment in areas that offer lower returns.
Most MNCs invest in regions where they can sell their products locally, and buy components locally. So if there's no supplier infrastructure and weak domestic markets, investment will be low. Despite the enormous wage disparity, the Netherlands is a much more attractive investment target than Haiti. Many poor countries are poor not because of foreign investment, but because they're largely outside the circuits of trade and capital. I can think of at least one person who gets very upset when I say that, but it's true.
Doug