Threat or Opportunity?
Studies in International Investment series
Edited by Karl P. Sauvant
Chapter 15: The Need for an Adequate International Framework for FDI
Joseph E. Stiglitz INTRODUCTION The thesis of my book Making Globalization Work (Stiglitz 2006) is that, in many ways, globalization has not lived up to its potential. I explain, for instance, the ways in which globalization has not beneﬁted everybody. It has not been the case that a rising tide lifts all boats: there are some people and countries who are actually worse oﬀ. But the problems are not inherent in globalization; it is the way in which globalization has been managed. In the book I try to describe a number of reforms that would help make globalization work, or at least work much better than it has so far for a lot of people. 15.1 A PERSPECTIVE ON TNCS In one chapter of my book I talk about transnational corporations (TNCs). This is very natural, because TNCs are the principal mechanism through which many of the beneﬁts of globalization are achieved, but also through which many of its problems are realized. This is why you hear diﬀerent views about these corporations. They are the vehicle through which knowledge is transferred. A large part of the knowledge is produced in the advanced industrial countries, and then gets transferred through TNCs to emerging markets. Training that occurs in many developing countries by TNCs helps close the knowledge gap between the developed and developing countries, and increasingly development economists see this knowledge gap as the central problem facing developing countries. To some extent, TNCs also play a role in...
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