Developing Countries and Multinational Corporations

Effects on Host Countries' Welfare and the Role of Government Policy

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The Net Effect on Host Countries

Unfortunately, most discussions of the effects of MNCs end up being a catalogue of various pros and cons; we are very much at fault for doing this, yet what is the alternative? It would be presumptuous to sum up the entire constellation of diverse effects and present a ‘net effect’; it would be equally unsatisfactory to leave out the unquantifiable and ‘non-economic’ effects and concentrate solely on things which can be measured. The formulation of any policy towards foreign investment and MNCs must, obviously, depend not only on the use of orthodox economics but also, perhaps even more so, on sensitive social, political and cultural judgment.


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