The picture created is of potentially footloose and fancy-free investors choosing
from a vast array of potential investment locations the one that offers them the best
anticipated return on their investment—that is, until a new and better opportunity
arises elsewhere. In order to attract investors in the first place, then, governments
must essentially internalize and approximate as closely as possible in terms of their
exhibited policy choices the preferences of mobile capital. Those preferences, in
turn, are anticipated to be for attractive investment incentives at the point of
initial investment, flexible labor markets, low rates of corporate taxation, a flexible
regulatory regime, and lax environmental standards. Big government and the taxation receipts out of which a generous welfare state might be funded are rendered
increasingly anachronistic—a guarantee of disinvestment and economic crisis.*******************************