Transnational Corporations and National Governments

MA course, Department of International Relations and European Studies, 2012/13 Winter Semester, 4 credits Instructor: Professor Béla Greskovits e-mail: [email protected], phone: 327-3079 Classes: Tuesday and Thursday 9.00-10.40, classroom tba. Office hours: tba.

Course outline

Crossing the boundaries between theories of development, globalization, and economic diplomacy, this course introduces participants into the political economy of foreign direct investment in less-advanced countries. After discussion of a few historical examples of successful “pathways from the periphery”, the course offers building blocks for an analytic approach - including varied concepts of the developmental state, the global commodity chain perspective, and models of bargaining between the transnational firm and domestic state actors. How do country size and other features of the national political economy, and the structure and dynamics of international markets shape governments’ capacity to bargain for development? What is the role of a skilled labor force in attracting high quality foreign investment? What roles can less advanced economies play in a world of globally organized production? What particular patterns of transnationalization can we observe e.g. in mining, automobiles, or textile industries? While the course takes many of its empirical examples from the foreign-led economic restructuring and varied international integration profiles of post-socialist economies, the analyzed cases will also include car manufacturing in Mexico, Brazil and East Asia, natural resource industries across the globe, IT industry in Ireland, textiles & garment industries in Italy and South Asia. Whenever possible, we shall address the relevance of other less-advanced countries’ experiences for the diversity of industrial profiles and current problems on Europe’s periphery.

Learning outcomes

The course prepares students for thesis writing through facilitating a) in-class discussion and debate; b) improved ability to form a critical opinion on the views expressed in the literature; c) enhanced skills for making comparisons across concepts and cases. d) While not focusing on Eastern Europe, the course provides background theoretical and empirical knowledge for students who plan to do research on related issues in this region.

Requirements and grading

Presence and active participation in in-class discussions (30% of final grade). One mid-term and one final in-class closed book written exam (35-35% of final grade each).

1 Topics and Required Readings

PART I: THEORETICAL AND HISTORICAL PERSPECTIVES

Week 1: Introduction to the class, and overview of foreign-led pathways of development on Europe’s periphery

Greskovits, B. “Leading Sectors and the Variety of Capitalism in Eastern Europe.” Actes de Gerpisa, 39 (2005): 113-128.

Week 2. Advantages of Backwardness?

Gerschenkron, A. Economic Backwardness in Historical Perspective. Cambridge and London 1976/1962: The Belknap Press of Harvard University Press. 5-30. Landes, D. “Does it Pay to be Late?” In Batou, J. ed., Between Development and Underdevelopment. Geneve: Publications du Centre D’Histoire Économique Internationale de L’Université de Geneve 1991: 43-66.

Week 3: Dependency and Development – Then and Now

Smith, T. “The Underdevelopment of Development Literature: The Case of Dependency Theory.” In Kohli, A., ed. The State and Development in the Third World. Princeton: Princeton University Press 1991: 25-66. Nölke, A. and A. Vliegenthart, “Enlarging the Varieties of Capitalism: The Emergence of Dependent Market Economies in East Central Europe.” World Politics 61. 4 (October 2009): 670- 702.

Week 4: Transnational Corporations (TNC) and Global Commodity Chains (GCC)

Moran, T. H. ”Multinational Corporations and Dependency: A Dialogue for Dependentistas and Non-Dependentistas.” International Organization (Winter 1978): 79-100. Gereffi, G. “Global Production Systems and Third World Development.” In Stallings, B. ed., Global Change, Regional Response. Cambridge: Cambridge University Press 1995: 100-142.

Week 5: Developmental States

Evans, P. “The State as a Problem and Solution: Predation, Embedded Autonomy, and Structural Change.” In Haggard, S. and Kaufman, R. R. eds., The Politics of Economic Adjustment 1992: 139-181. Ó Riain, S. “The Flexible Developmental State: Globalization, Information Technology, and the Celtic Tiger.” Politics and Society. Vol. 28 No. 2. (June 2000): 157-193.

PART II: HOW “THE REST” COMPETES WITH THE WEST?

Week 6: Nationalist versus Dependent Paths

Amsden, A. The Rise of “the Rest.” Challenges to the West from Late-Industrializing Economies (Oxford: Oxford University Press, 2001): 1-28.

2 Kohli, A. “Nationalist versus Dependent Capitalist Development: Alternate Pathways of Asia and Latin America in a Globalized World,” Studies in Comparative International Development Vol. 4, No. 44 (July 2009): 386-410.

Midterm exam!!!

Week 7: Maquiladoras and “Reverse Maquiladoras” in the Enlarged Europe

Ellingstad, M. “The Maquiladora Syndrome: Central European Prospects,” Europe-Asia Studies, Vol. 49, 1 (1997): 7-21. Marin, D. The Opening up of Eastern Europe at 20 – Jobs, Skills, and Reverse Maquiladoras in Austria and Germany. Bruegel Working Paper 2010/02.

PART III: INDUSTRY-SPECIFIC PATTERNS OF STATE-FIRM RELATIONSHIPS

Week 8: Resource-based Industries

Shafer, M. D. “Capturing the Mineral Multinationals: Advantage or Disadvantage? In Moran, T. H. ed., Multinational Corporations (1985). 25-53. Ross, M. J. “The Political Economy of the Resource Curse.” World Politics 51 (January 1999): 297-322.

Week 9: Physical and Human Capital-Intensive Industries

Naeyoung, L. and Cason, J “Automobile Commodity Chains in the NICs: A Comparison of South Korea, Mexico, and Brazil.” In Gereffi, G. and Wyman, D. L., eds., Manufacturing Miracles. Princeton: Princeton University Press 1990: 223-243. Bennett, D. C. and Sharpe, K. E. “Agenda Setting and Bargaining Power: The Mexican State versus Transnational Automobile Corporations.” In Kohli, A. ed., The State and Development in the Third World. Princeton: Princeton University Press 1991: 209-241.

Week 10: Small Firm Networks, and Sweatshop Plants

Best, M. The New Competition. Institutions of Industrial Restructuring. Cambridge: Harvard University Press 1990: 203-226. Harrison, B. Lean and Mean. The Changing Landscape of Corporate Power in the Age of Flexibility. New York, N. Y. Basic Books 1994: 75-105. Elson, D. “Uneven Development and the Textiles and Clothing Industry.” In Sklair, L. ed., Capitalism & Development. London and New York: Routledge 1994: 189-210.

Week 11: Financialization, Crisis, and Small “Tigers” in Hard Times

Ó Riain, Sean, “Addicted to Growth: State, Market and the Difficult Politics of Development in Ireland,” forthcoming in M. Bøss (ed.) The Nation-State in Transformation: The Governance, Growth and Cohesion of Small States under Globalisation (Aarhus University Press). Bohle, D, “Countries in Distress: Transformation, Transnationalization and Crisis in Hungary and Latvia,” Emecon 1/2010, www.emecon.eu/Bohle.

Week 12: Wrapping up, Final exam!!!

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