chapter  10
11 Pages

Third World Governments and Multinational Corporations: Dynamics of Host’s Bargaining Power

BySHAH M. TARZI

In their economic relationships with multinational corporations, Third World countries would seem to have the critical advantage, inasmuch as they control access to their own territory. That access includes internal markets, the local labour supplies, investment opportunities, sources of raw materials, and other resources that multinational firms need or desire. In practical terms, however, this apparent bargaining advantage on the part of the host nation, in most instances, is greatly surpassed by the superior advantages of the multinationals. Multinational corporations possess the required capital, technology, managerial skills, access to world markets, and other resources that governments in the Third World need or wish to obtain for purposes of economic development.