Question

1. For the following policy proposals, explain if entity or enterprise approach are the best to address the issue.
   1. Global corporate taxation
   2. Policy to minimum child labor in manufacturing goods
   3. Policy to prevent corruption practices by a corporation
   4. Policy to enforce minimum wage
   5. Policy to enforce environmental standards

Answer 1

A. Global corporate taxation- Entity approach. Entity approach is more suitable because taxation rates vary across countries and are actually one tool which many countries use to make themselves more attractive for investment from different MNCs.

B. Policy to minimum child labor in manufacturing goods- Enterprise approach. Child labor should be universally banished. There is no reason for countries to have entity approach where laws can vary between entities of an enterprise.

C. Policy to prevent corruption practices by a corporation- Entity approach. While enterprise approach has its own advantages, I feel that using enterprise approach means putting local entities in developing countries at a disadvantage as their laws on corruption might not be as stringent as US laws and using enterprise approach would put them at a disadvantage as compare to local competitiors.

D. Policy to enforce minimum wage- Entity approach. This is obvious as there are living standard differences between countries and using one approach across all entities would not be a good idea as then different locations will either have very high wages or very low wages.

E. Policy to enforce environmental standards- Enterprise approach. This is because while the laws may be different in different geographies, the issues affect us all similarly and impact on environment is not limited to a geography.