ABSTRACT
This chapter explores the economic and political relationships between multinational enterprises (MNE) and less developed countries (LDC) that give rise to the need for a more systematic method to evaluate, measure, and forecast political events that affect investment considerations. The Organization for Economic Cooperation and Development (OECD) is the only international body that has reached agreement on a code of conduct for investments. United States (US) corporations usually view foreign investments as riskier than investments in the US, in large part because of the uncertainty of the political environment in the host country. Partly in response to the MNEs’ past abuses, host countries and international organizations have begun to view international regulation of the MNEs as necessary and desirable. The United States has recently begun to feel the uneasiness of foreign investment. The development is of considerable importance at a time when the United States is increasingly dependent on the LDCs for various natural resources.
