ABSTRACT

The relationship between multinational enterprise and governments is usually presented as a zero-sum power game, until recently, in which multinationals have become increasingly powerful at the expense of governments. Yet many theories of the development of global business regard governments as exogenous variables, focusing instead on the internal dynamics of MNEs. Historical studies of the relationship between multinationals and governments have shown both these positions to be flawed. First, governments and multinationals have had an interdependent relationship – ignoring government when considering the development of global business excludes a key explanatory factor in the development of both. Secondly, multinationals and governments can cooperate as well as be in conflict and historians have shown that context and contingency is crucial in understanding the nature of that relationship in any particular case.