multinational corporations
multinational corporations in the international system
economic influence
enactment of policy
- macroeconomic policy * fiscal policy — stimulate a state’s economy through government intervention, often via changes to the national budget * monetary policy — change the supply of a given currency in a country, and the amount of money in circulation
- microeconomic policy * regulations * subsidies * competition-based policy
- tariffs and non-tariff barriers
trade and development
- investment in developing countries
- MNCs account for 50% of global trade and 80% of global profits
- operate internationally
- provide employment opportunities
case study: the World Trade Organization (WTO)
- purpose: negotiate and determine internationally-accepted rules and regulations surrounding trade * accomplished through ambassadors representing individual states meeting to discuss economic policy and trade conditions such as tariffs
- significant economic impact on the rest of the world
- more-developed countries tend to have more conflicts taken to the WTO than less-developed countries because MDCs tend to have better and more accessible communication technology and more efficient methods of transportation * this leads to increased trade and thus increased opportunity for conflicts to arise
neoliberalism and MNCs
- modern decline of capital controls + flooding the market
- free markets + free trade * lack of economic nationalism * no trade barriers, no protectionism, no tariffs, no dumping
- absolute gains
- comparative advantage
- globalization
- major corporations in the new world order * WTO/GATT * WB * SAP-IMF
neo-mercantilism and MNCs
- short-term focus
- emphasis on economic nationalism * state wants to accumulate wealth (wealth = power)
- concerned with over interdependence on other countries
- money is fungible * uses protectionism, tariffs → decrease imports and increase exports