The Effects of Multinational on the Developing Countries

Known as the addiction theory, this view held that the resources of the poor ontogenesis countries were necessary to the plans of the global corporations. These resources (raw materials, tawdry labor, and potential consumers) were the source of the finance capital needed for the valetwide expansion of these corporations. In addition, there were links amidst the embodied view of these countries, as the source of profits and finance capital, and the policy-making view of these countries as contributors to the U.S. balance of payments (Barnet & Muller, 1974, p. 125).

The addiction theory is establish upon a model of world economics with a heart and a periphery. At the center are the developed countries of the join States and Western Europe; on the periphery are the create countries of the Third World. Basically, the dependency theory argues that: 1) the interest of the multinationals lies in dissimilitude in the periphery states, where the demand of the elite is the only useful market for the corporate goods, but equality in the interchange states, where the masses can afford the corporations' goods; 2) the peripheral states are helpless to control the behavior of the multinationals; and 3) inequality is in the interest of the paramount social class formation of the periphery (Muller, 1984, p. 258).

The multinational corporations, headquartered in the center (developed) countries, foster dependence on the part of the countries on the periphery both indirectly and dire

Barnet, Richard J., & Ronald E. Muller. (1974). Global Reach: The Power of Multinational Corporations. New York: Simon & Schuster.

joined Nations. (1988). Centre on transnational corporations. Transnational corporations in world development: Trends and prospects. ST/CTC/89. New York: United Nations.

It has been suggested that the political influence of multinationals on the governments of emcee countries is on the decline. The reason for this may be that host countries have realized that they must limit the political activities of the multinationals time fostering foreign investment.

Thus, the host countries have enacted laws and regulations restricting the political activities of corporations, while cooperating with the corporations in economic matters. As a result, the relationships between the multinationals and host governments have become less antagonistic and more mutually beneficial (United Nations, 1988, pp. 225-26).

The actual conditions of the maquiladoros are difficult to specify because the American and Mexican managers discourage investigations, denying reporters and others access to the plants; the Mexican government, meanwhile, discourages inquiries and studies. amply worker turnover rates make health surveys impossible. However, cliquish investigators have discovered evidence that working conditions include unforesightful ventilation and lighting, lack of safety equipment, and frequent accidents. Workers are manifestly given little in the way of safety array or safety instructions concerning the materials being used (LaDou, 1991, p. 51).

As shown above, the economic effects of multinationals has been in dispute for a fig of years. The most widely reported effects by the dependency theorists have been the net outflow of finance capital, the discouragement of locally-owned business enterprise competition, and the transfer of technology irrelevant to needs of most developing countries (thereby stunting long-term economic growth).<
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