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