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International Regime Theory and Foreign Direct Investment

Abstract

In his book, “U.S. Power and the Multinational Corporation”, Gilpin (1975) asserts that the trouble with removing the artificial line that separates the political and economic sub-systems lies in the fact that “economists do not really believe in power, [and] political scientists, for their part, do not really believe in markets”.571 Indeed, since Gilpin’s first attempt thirty years ago to establish a political economy of foreign investment, much of the writing by economists and political scientists on that subject has been “as if they were talking about entirely different sets of actors and activities”.572 The following analysis assumes the relationship between economics and politics to be a reciprocal one, and should therefore be understood as an attempt to qualify FDI governance-related suggestions made in previous normative sections in the context of international and domestic politics.

Keywords

Foreign Direct Investment Multinational Corporation Issue Area Domestic Politics International Regime 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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References

  1. 571.
    GILPIN (1975), p. 5.Google Scholar
  2. 572.
    GILPIN (1975), p. 3, referring to SUSAN STRANGE’s “Sterling and British Policy” (1971).Google Scholar
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    KRASNER (1983), p. 2.Google Scholar
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    KEOHANE (1989), p. 4. The simplification was partly in response to various criticisms (YOUNG, 1986; HAGGARD/ SIMMONS, 1987) leveled against Krasner’s complex regime definition.Google Scholar
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    According to WALZ (1954), there are three distinct levels (“images”) of analysis in international relations: the international systems level (third image), which is determined by the constellation of competing states in world politics; the domestic level (second image), which focuses on the internal structures of states; and the individual level (first image), which focuses on behavioral aspects of the participating human actors. For a “second-image reversed” approach (focusing on the impact of the international system on internal structure of states) see, for example, GOUREVITCH (1978).Google Scholar
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    A third school of thought which emphasizes knowledge dynamics and ideas as explanatory variables will not be discussed here, as the focus of the ensuing analysis is a symbiosis of power-and interest-based theories. For further details on knowledge-based regime theories see, for example, HASENCLEVER/ MAYER/ RITTBERGER (1997), pp. 136–222.Google Scholar
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    A distinction can be made between “behavioral power”, i.e., the ability to get someone to do something he does not want to do, and “resource power”, i.e., the possession of certain resources that will allow someone to achieve the former outcomes (see KEOHANE/ NYE, 1998).Google Scholar
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