ABSTRACT
The fact that the premisses underlying the theoretical model are not met often leads capital-importing countries to suspect that too much direct investment might be carried out overall or in specific sectors and industries. Differences in the assessment of the impact of direct investment also make international consensus on the aims and configuration of a multilateral insurance scheme difficult to achieve. This chapter shows that the aims of the individual developing countries differ widely, an operational multilateral insurance scheme cannot be burdened with this task. Hence national or multilateral insurance schemes with the necessary financial resources offer to write insurance against these risks. A full insurance requirement can probably be dispensed with, as even without it the risks portfolio of a multilateral insurance scheme should be large enough, at least if it is the only institution of its kind. Apart from identifying eligible transactions, the central problem of direct investment insurance is defining insurable risks.
