This study examines the political and economic determinants of U.S. foreign direct investment (FDI) in Latin America. The analysis focuses on fifteen Latin American and Caribbean countries for the period of 1979 to 1996. Market size, workers' skill levels, and political instability are found to have a statistically significant effect on the investment behavior of U.S. multinational firms. In addition, we find that a poor human rights record and military coups d'etat positively influenced U.S. FDI flows during the time series.

Biglaiser and DeRouen (2006)1 have provided a thorough examination of the effects of different types of economic reforms on flows of foreign direct investment (FDI). Their main finding—that economic reforms were generally unsuccessful in generating inflows of FDI during the time series—will undoubtedly generate further discussion about neoliberalism in Latin America. Although the authors' focus is on economic reform, they also devote considerable attention to the significance of “good governance” variables, including the effects of political regime type. Biglaiser and DeRouen's (2006) paper adds to a growing number of studies that have produced conflicting findings regarding the effects of regime type and/or rights and liberties on FDI.2 Given the conflicting results in the literature, and the policy significance of the issue, a brief commentary on the question of regime type, rights, and FDI in Latin America (and in other developing areas) is warranted.

In a recent article, Montero (2008) sought to clarify the determinants of foreign direct investment (FDI) in Latin America. Testing a number of competing hypotheses, he found that macroeconomic stability, as measured by the current account, had the most consistent effect on FDI flows across countries in the region. Although Montero was interested in the role of macroeconomic stability, he also explored the impact of governance factors, including human rights and regime type. His results suggest that the effects of rights and regime type are inconsistent. Briefly, in his models that focused on governance and cost-related factors, the coefficient for the terror scale (rights abuse) had a positive and significant effect in two of three trials; in the same trials, the coefficient for Polity IV (regime) was negative and statistically significant, which suggests that politically competitive regimes received less FDI. Nevertheless, when Montero modeled the effects of economic reform, rights abuse and regime type were no longer statistically significant (Montero 2008, Table 1). Given the inconclusive nature of his findings with regard to rights and regime type, and the ongoing controversy in the literature, a brief comment on his article is potentially instructive.

Many scholars have suggested that Japan aligned its foreign policy with the US War on Terror. Part of Japan's alignment is said to have involved disbursement of foreign aid to support the US in Afghanistan and Iraq, and with other security interests associated with the War on Terror. To date, however, there has been little empirical study of this question. Employing a data set on Japanese aid to 133 countries between 1995 and 2008, we examine the War on Terror and Japanese ODA. We find that Japanese aid was aligned with some security interests in the War on Terror, but the effects were mixed.

Three perspectives on the determinants of Japan's official development assistance (ODA) program are often represented as distinct, valid explanations of the aid program. Yet few studies have attempted to simultaneously test the hypotheses generated from all three perspectives in a global study of Japanese aid flows. This study seeks to improve the understanding of the Japanese ODA program by addressing some of the gaps in the existing literature. Providing a comprehensive analysis, the article investigates the effects of different political and economic variables on Japanese aid disbursement in eighty-six countries in Africa, Asia, Latin America, and the Middle East from 1979 to 2002. The findings of the study make several contributions to the literature. First, the results provide strong support for the claim that humanitarian concerns, as measured by poverty and human rights conditions in recipient countries, are important determinants of aid allocation. Second, although much of the previous literature has hypothesized that Japan's aid program seeks to promote Japan's economic interests, little empirical support for this view is found in the present study. Likewise, the disbursement pattern of ODA was associated with only a limited number of US security interests; US economic interests are shown to have no effect on ODA.