Main Article Content
For the World Bank, the importance of the legal climate for attracting foreign investment is axiomatic and the legal and political aspects of an investment climate are measured in the World Bank’s ‘good governance’ programme. However, the assumptions underlying this rely on quantitative research setting out correlation and highlighting a narrow range of voices. An ESL-inspired approach to empirical work can question what investors want from a host state legal system while also addressing criticisms of existing literature. As a case study, Sri Lanka is set out as a country actively engaged in attracting foreign investment through the creation of an ideal investment climate.
The discussion first describes the empirical by setting out the role of World Bank rationalities in shaping Sri Lanka’s investment climate. It then defines the analytical, locating ESL in the social sciences and outlining the debates surrounding the central concept of embeddedness. It goes on to design an alternative approach by combining elements of three frames, both addressing existing criticisms and avoiding embeddedness. This is then deployed and the applications and implications for framing relations of foreign investors in Sri Lanka are set out.