Importance of Foreign Direct Investment (FDI) in Kosovo and creation of favorable policies in attracting them

Domestic investment is essential to the development of each country, but at times is inadequate in most countries that aim for sustainable and long-term growth. Hence, most countries, and Kosovo, have a continuing need for additional capital, which, with adequate institutional policies, can be secured through Foreign Direct Investment (FDI). While in developed countries there are debates about and against FDI (especially about the type of FDI when an investment can be made from local capital), in underdeveloped and developing countries there is a consensus on the need for FDI to meet the need for investments that cannot be realized through local investment. Some developing countries, and Kosovo have made constant efforts to increase these investments, but have faced significant problems in attracting foreign investors. Disadvantaged institutional policies, including monopoly policies and fiscal policies, have been one of the limiting factors. This paper aims to analyze current policies in Kosovo related to attracting Foreign Direct Investment (FDI) and identify and analyze institutional policies that are both FDI facilitators, but the main focus will be on current and potential policies that can will negatively impact on FDI attraction. At the end of the paper some conclusions will be drawn based on research on the current situation, and I will number some policy recommendations that may advance attracting Foreign Direct Investment (FDI)