DB's Pixnet

Harvard Business Review, March 2012
Page 119

Eight Rules For Direct Investment Programs

1. Let the market provide direction.

2. Don't tie manager's hands.

3. Be patient.

4. Get the scale of the program right.

5. Accept that many ventures must be global.
Policy makers naturally aim to encourage activity in their backyards, but many firms today need a multinational presence. Don't restrict firms to hiring and manufacturing locally. Do help local companies connect with overseas...

6. Evaluate performance.

7. Avoid "Capture".
Like zombies in a horror film, some public programs defy efforts to eliminate them and may keep rising from the dead. Economists call this problem "capture": Vested interests coalesce behind a program and use their power to sustain it. Be willing to end programs that are not doing well; also end public funding for programs that have become so successful that they no longer need it. Regularly revisit program rules, knowing that changing the classes of participants who benefit may provoke an outcry.

8. Minimize agency problems.

DB, SSN057-86-4042,
March 17, 2012, Saturday,
National Central Library,
Taipei City