The Causal Links between FDI and Economic Growth in Developing Countries: A Case Study of the Republic of Rwanda

The study examines the short-run and long-run causality running from real economic growth to real foreign direct investment inflows (RFDI). Other variables such as education (involving combination of primary, secondary and tertiary enrolment as a proxy to education), real development finance, unskilled labour, to real RFDI inflows are included in the study. The time series data covering the period of 1983 -2013 are examined. First, I applied Augmented Dicky-Fuller (ADF) technique to test for unit root in variables. Findings shows all variables integrated of order one [I(1)]. Thereafter, Johansen Co-integration Test (JCT) was conducted to establish the relationship among variables. Both trace and maximum Eigen value at 5% level of significance indicate 3 co-integrated equations. Vector error correction method (VECM) was applied to capture short and long-run causality running from education, economic growth, real development finance, and unskilled labour to real foreign direct investment inflows in the Republic of Rwanda. Findings shows no short-run causality running from education, real development finance, real GDP and unskilled labour to real FDI inflows, however there were existence of long-run causality. This can be interpreted that, in the short-run; education, development finance, finance and economic growth does not influence inflows of foreign direct investment in Rwanda; but it does in long-run. From the policy perspective, the Republic of Rwanda should focus more on long term goal of investing in education to improve human capital, undertake policy reforms that promotes economic growth, in addition to promoting good governance to attract development finance – especially from Nordics countries (particularly Norway and Denmark).

Lines in class The ongoing attack on mass education in England

Andrew McGettigan’s analysis of the financial transformations of higher education (‘Who Let the Dogs Out? The Privatization of Higher Education’, RP 174)is important for comprehending the complexity of the changes universities are undergoing and their implications. As he argues, ‘it is mass higher education in England’ that is now under attack and adequately responding to this requires the development of new habits and new forms of thought. It is also necessary to contextualize this attack in relation to comparable changes occurring in other educational sectors in England, not least because it is through control of the points of intersection between primary, secondary, and tertiary education that the government’s political intent is being most effectively realized. An analysis of these changes reveals the broader nature of the attack on the idea and practice of mass education itself.