The Political System Of Multinational Corporations

REACTIONARY PAPER 6 This chapter argues that besides democratic institutions in a country, there are other factors that that multinational corporations take into consideration before deciding whether to invest in a country or not. The author refers to this other factor(s) as veto players which he describes as either being individual or collective actors and whose approval warrants policy change in a state. Essentially, veto players constitute a system in which there are checks and balance which is a good thing for the MNCs because it means that institutions will provide policy commitments while at the same time offering policy flexibility if necessary. This is a big for MNCs because they care about how policy change(s) might affect their operations and subsequently, they rely on governments to provide policy conditions that are market friendly. It is argued that many actors in a political system are essential to multinationals because they base their decisions of investment on it. Th e author names three distinct forms of government structure; fiscal federalism, political federalism and political decentralization of which he argues that politically federal institutions are more conducive to multinational corporations and hence, they attract the most FDI inflows. One important thing to take note of is that federal institutions create† small governments â€Å"which allows nation states to commit to ensuring property rights of multinational corporations. On the opposite, it’sShow MoreRelatedMultinational Corporations And The Political Stability Essay1432 Words   |  6 PagesMultinational Corporations in Switzerland Located in Central Europe, Switzerland is known for its natural beauty, chocolate, banks, neutral stance on global politics and hosts the worlds most innovative hub. Switzerland has a track record for attracting global organizations and a variety of industries. 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