ABSTRACT
Foreign investment can lead to whole sectors of an economy being dominated by foreign firms which may in turn result in adverse balance of payments effects which have flow on effects for management of the economy. Interventionists believe that policy measures are necessary to avoid industry domination through restrictions on foreign firms in sectors which are of significance to overall industrial development. Policy makers had prompts to make the changes because they had become aware of some adverse economic consequences from foreign investment in other countries but perhaps more importantly because legitimacy concerns required them to be seen to be taking a much tougher stance. The policy outcomes also failed to meet the objectives of top policy makers. The elements of bureaucratic capacity which have emphasised include the structuring of institutions, leadership and ideology and how the combined in relation to the issue of foreign investment.
