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

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