Back to the Future
Chapter 7: Towards a New Paradigm of Development: Implications for the Determinants of International Business Activity
7. Towards a new paradigm of development: implications for the determinants of international business activity 1. INTRODUCTION One of the (largely) unexpected consequences of the contemporary phase of globalization is that it is compelling academic scholars, national governments and supranational entities to reappraise the nature and purposes of development; and the ways in which the activities of multinational corporations (MNEs)1 are both responding to, and helping to shape, it. In this chapter, I shall first summarize the main ingredients of what we shall term the new paradigm of development (NPD), and how these differ, in substance or emphasis, from those which were generally accepted in the economics profession in the 1970s and 1980s. In doing so, we shall give particular attention to the recent writings of three Nobel Laureates in Economics – Amartya Sen, Joseph Stiglitz and Douglass North – and set these in the context of the cultures, belief systems and actions of the stakeholders in the international economy in respect of 20/21 globalization.2 We shall then offer our own interpretation of the NPD; and, in doing so, shall focus on (what in our judgement is) one of its most neglected – though important – components, viz. the content, structure and effectiveness of its institutions. The final part of the chapter will examine some of the implications of the NPD for our theorizing about the determinants of transnational corporation (TNC) activity in developing countries. In particular, we shall introduce the concept of institutional assets into the received eclectic, or OLI,3 paradigm...
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