Policies towards multinationals

The ‘complete package’ of private foreign investment presented by the multinational enterprise has not only the advantages frequently claimed for it, but has also serious weaknesses, particularly for international income distribution. High international mobility of scarce, rent and quasi-rent earning factors (technical know-how, management, marketing), combined with no international mobility of unskilled and semi-skilled labour in highly elastic supply domestically implies an uneven division of gains. To prevent the lion's share going to the lion, bargaining strategies are suggested that enable the developing host country to share in some of the rents and quasi-rents.