This book systematically explores the effects upon
underdeveloped countries of direct foreign investments made by
multinational corporations. The author pays particular attention to
themes prevalent in the international political economy literature
that depict foreign investment as alternately aiding or hindering
economic development in the Third World. In constructing his
analysis, Rothgeb treats the relationship between the multinational
corporation and the underdeveloped host state as a political
relationship, demonstrating that the results of foreign investment
depend in large part upon the differing strengths of the actors in
the relationship and how they use the advantages derived from their
power.
Following an introductory chapter which reviews the current
status of research on the subject, Rothgeb turns to a consideration
of how foreign investments affect host state foreign policy. He
then addresses the domestic political and social effects of foreign
investment and identifies four basic conceptions of the role played
by foreign investment. Finally, Rothgeb focuses on economic growth,
analyzing the ways in which multinational firms affect growth via
their effects on capital availability, the degree to which the
government plays a leading role in managing society, and changes in
the composition of the local labor force. The author's conclusions
regarding the political effects of foreign investment should be
required reading for students of economic development and
international relations, as well as for policymakers and executives
of multinational firms.
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