Abstract

International competition for the attraction of foreign direct investment (FDI) is becoming fiercer in an era of extended globalization. Unlike other EU member states such as Spain, France or even the UK, in Italy there is concern due to decades of stagnation in terms of economic growth and inward FDI. After discussing the extant literature on FDI attraction policy tools, and following a comprehensive account of the country's overall investment environment, the article explores the role of policy uncertainty and fragmentation as further possible determinants for Italy's mediocre performance. The paper also examines two brief case studies from the infrastructure sector, whereby the interaction between governments and investors often plays a pivotal role in the success of FDI projects.