importance of IPA sectoral targeting is extensive (see section 2.1) and is often considered to help the IPA by making it easier to communicate priorities, target investors and advocate necessary policy reforms.

Heilbron and Kronfol (2020) further argue that the mandate of effective IPAs is limited mostly to foreign investment promotion. Yet, many countries expand the role of IPAs to focus on other tasks including supporting domestic direct investment (DDI), negotiate investment agreements, issue licenses, promote exports, negotiate public concessions, and administer public- private partnerships (PPPs). This can lead to conflicts of interest when the promoter is under the same roof as the regulator, or incentives approver or when resources favor domestic investment to the detriment of FDI promotion (Heilbron and Whyte 2019). It may also dilute a focus on FDI promotion. As such, Heilbron and Kronfol (2020) find a strong negative association between the number of IPA mandates and FDI inflows in developing countries.

# **Organizational Framework and Resourcing**

A third component of effective IPAs proposed by Heilbron and Kronfol (2020) relates to an organizational structure that aligns with its vision and strategic priorities. This includes ensuring that the organization has the appropriate guidelines, protocols and key performance indicators (KPIs) that correspond to its strategy. In addition, such IPAs are ensured to receive sufficient and sustained financial resources over the medium-term, to ensure a stable and continued ability to purpose investment promotion (Morisset and Andrews; Johnson 2004; Volpe Martincus and Sztajerowska 2019). A greater overseas presence of IPAs through dedicated offices may also help their functioning (see 2.1; Anderson and Sutherland 2015).

Yet the most important resource for IPAs tends to be its staff – and so effective IPAs recruit workers with the appropriate experience and pay. According to Ortega and Griffin (2009) IPAs need both management and staff members who have appropriate private sector experience, service skills, and deep business knowledge (including understanding of investor needs, motivations, challenges, and concerns but also sector terminology and trends). Nelson (2009) further calls for staff with international exposure, that would have the appropriate language and cultural skills to foster translational learning. They further find that traditional civil service recruitment and pay policies hamper IPAs potential to recruit such qualified, specialized staff. More effective IPAs therefore have the operational independence and financial ability to recruit such staff and provide them with adequate compensation (often in line with the private sector).

# **Investor Service Delivery**

A fourth area of IPA effectiveness relates to their ability to provide high-quality services to increase investor satisfaction, notably in areas considered most relevant to meet sectoral strategic priorities. As an example, Harding and Javorcik (2012) find that better information services (such as website information and inquiry handling) are positively correlated with FDI inflows. According to the World Bank’s 2017 GIC Survey, IPA services were often most appreciated by investors during the establishment, retention, and expansion stages of investment. This included both hands-on assistance with issues during registration and business establishment, but also advocacy to improve the business environment (World Bank 2018).

IPAs with quality services also tend to adopt a series of tools, systems and monitoring and evaluation (M&E) framework that help identify investor priorities and strengthen their service delivery. Examples of this include development of standard operating procedures, a customer relationship management (CRM) system or adopting a system for gathering investor complaints or disputes. Using digitalization and emerging technologies was considered an important attribute by IPAs to help reach target investors more efficiently (DCI 2017; WAIPA 2019). The United Kingdom reported several improvements in the functioning of the different IPAs in its union because of a new M&E framework (DIT 2018, 2019).

8