Critically discuss the following viewpoint: the multinationals (MNCs) hold power over national governments
This statement is based on the widely held belief that in the process of widening and deepening globalisation over the past three decades, MNCs have increasingly become supranational entities and thus have been able to avoid and circumvent the control and regulative power of individual nation states. In evaluating such a statement, students may want to focus on the following key issues:
• Is there any theoretical underpinning for limiting the role of the state and thus giving the MNCs a free-reign to compete globally over the past few decades? (Hint: you may want to examine the “Washington Consensus”)
• Is there any regulatory reform that has facilitated this liberalisation process? (Hint: the general reduction in world tariffs and trade barriers over the past few decades)
• What are the key mechanisms and methods by which MNCs can do so? (Hint: one example is firm internal transfer pricing)
• Is there any evidence to substantiate this statement? How strong is the evidence?
• Is there evidence for counter-arguments? (Hint: many MNCs have low TNIs and their operations tend to be highly regionalised rather than global)
• Is there any theoretical support for the state to play a useful role in monitoring and regulating MNC operations?
• What are the main methods and mechanisms by which the state can do so?
The list above is only suggestive. Students are strongly encouraged to extend the discussion through further reading and research.
– Please use Google scholar to find information (at least from 2 sources)
– Some useful website:
https://hbr.org/1980/03/how-mncs-cope-with-host-government-intervention
https://www.theguardian.com/commentisfree/2014/jun/02/control-nation-states-corporations-autonomy-neoliberalism
http://www.sharing.org/information-centre/articles/illegitimate-power-multinational-corporations