Role of Governance Infrastructure in Attracting FDI to Georgia

Abstract

Many economists argue that FDI has a significant role for countries economic growth, especially, countries like Georgia. However,the question is how to attract FDI into our country. There are several factors which make economy attractive for foreigners.The purpose of this research is to focus on the role of governance infrastructure which is one of the most important fordeveloping nations. This is a relatively new term for Georgian economy, which contains of all regulations, legislation and legalsystems of the country. Thus, their importance will be investigated.The methods used for this research are survey, interview and some other observation on the operation of Georgianeconomy. The interview was conducted with Georgian expert in politics. Expert in economics was also asked to answerseveral questions. In addition, the Survey was applied to 60 people and as a result most of them agreed on the importanceof governance infrastructure, that it needs improvement and that it will definitely make Georgia more attractive country forpotential investors.In conclusion policy-makers should pay much attention to those institutions which can contribute more to the creation ofstable economic environment and investment environment. Improvement of governance infrastructure will definitely decreasethe risks for potential investors, increase their confidence in our country, and push them towards more investments, especiallywhen Georgia’s geographic location offers wide variety of spheres where foreigners can do business.