Global Capitalism, FDI and Competitiveness

Global Capitalism, FDI and Competitiveness

The Selected Essays of John H. Dunning, Volume II

John H. Dunning

Global Capitalism, FDI and Competitiveness comprises 15 of John Dunning’s most widely acknowledged writings on the changing characteristics of the global economy over the past three decades. In particular, it examines how these events have shaped, and been shaped by, the growing internationalization of all forms of business activity.

Chapter 14: Governments and the Macro-organization of Economic Activity: A Historical and Spatial Perspective

John H. Dunning

Subjects: business and management, international business


Dunning2 04 chap 13 19/7/02 11:21 am Page 373 14. Governments and the macroorganization of economic activity: a historical and spatial perspective* INTRODUCTION The optimal role of governments1 in the organization of economic activity has long been a subject of intense – and sometimes passionate – controversy. Yet a study of the writings of the leading scholars of the past two centuries reveals that these have reflected not only their personal ideologies, and the economic and institutional milieu of the time in which they lived, but the particular issues addressed by them. Indeed, while not wishing to underestimate the real differences of opinion among social scientists about the rationale for, and the appropriate content of, government involvement in the creation and management of resources within their jurisdiction, it is, nevertheless, possible to identify a distinct evolutionary pattern of scholarly thinking, and the reasons for it. This chapter has two main tasks. The first is to trace the lineage of academic writings since the time of Adam Smith, on the respective roles of markets, hierarchies, inter-firm alliances, and governments as modes of organizing economic activity in a capitalist economy; and also to analyse why, and in what ways, economists, political scientists, and organizational theorists have differed in their interpretation of the optimal role of governments. The second is to examine the implications of the internationalization, and more recently the globalization, of economic activity for the governance of resource creation and deployment, and the extent to which national administrations and supra-national regimes need...

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