ABSTRACT
In considering the likely outcomes of foreign controlled extractive activities in less developed countries (LDCs), it is thus necessary for assumptions to be made about the objectives of government for two reasons. First, because this will determine the types of instrument which the government will use to attempt to achieve its objectives; and second, because this will determine the interests of the government in the bargaining situation. “Domestic imperialism” has been defined as a situation where the government seeks to maximize a social welfare function of its own choosing, that does not reflect the preferences of the population. A cynic or a marxist might well claim that this is in fact the most frequently occurring type of government in ldc’s. Governments emphasizing survival or domestic imperialism may have within them individuals with at least some idealistic good intentions, who will seek to act as idealists at times and may well succeed for shorter or longer periods.
