October 1995 The more liberal a country's foreign exchange system, the more foreign direct investment is likely to be independent of current account and other capital flows. Fry, Claessens, Burridge, and Blanchet examine flows of foreign direct investment to 46 developing countriesto test whether such flows are autonomous or accommodating vis-á-vis the current account and other capital flows. Using Granger-causality tests, they find that: * Requirements to surrender export proceeds to the monetary authorities and the existence of special exchange rates for some capital account transactions reduce the probability that foreign direct investment is independent. * The more liberal a country's foreign exchange system, the more foreign direct investment is likely to be independent or exogenous. * Foreign direct investment is associated with a larger increase in capital formation when it is independent than when it is Granger-caused by other capital flows. This paper -- a product of the Debt and International Finance Division, International Economics Department -- is part of a larger effort in the department to study the determinants and impact of foreign direct investment. The study was funded by the Bank's Research Support Budget under the research project Foreign Direct Investment in a Macroeconomic Framework (RPO 678-15).

A possibly nonstationary autoregressive process, of unknown finite order, with possibly infinite-variance innovations is studied. The ordinary least squares autoregressive parameter estimates are shown to be consistent, and their rate of convergence, which depends on the index of stability, is established. We also establish consistency of lag-order selection criteria in the nonstationary case. A small experiment illustrates the relative performance of different lag-length selection criteria in finite samples.

This chapter examines teachers' pedagogical decisions and how routinization of practice can lead to the ineffective application of pedagogy that hinders student development and achievement. Identification of tacit knowledge that supports routinization can enable teachers to critique their teaching practice and identify pedagogies that are more appropriate for the students they teach. The work of Bourdieu and Giddens provides a sociological framework to analyse the influences on pedagogical decision-making. Evidence from a case study is used to illustrate how teacher professional habitus, motivation, ontological security, routinization and time and space interact to inhibit or enable expansion of teachers' knowledgeability and the frames of practice inform their choice and development of pedagogy.