Institutions, Institutional Change and Economic Performance in Emerging Markets
Emerging markets play an increasingly important role in the global economy, accounting for 31% of global GDP and more than 50% of global foreign direct investment in 2012. However, doing business in emerging markets remains subject to a high degree of "policy risk," namely the risk that a government will discriminatorily change the laws, regulations, or contracts governing an investment or will fail to enforce them in a way that reduces an investor's financial returns.