Question

In: Economics

Has there been a "power shift" away from states and towards multinational corporations?

  1. Has there been a "power shift" away from states and towards multinational corporations?

Solutions

Expert Solution

This is subjective. But in my opinion it has not completely. We can say there is a "power shift" when the MNC located in a particular country has extraordinary revenues and influences the government to make decisions in their favors. These MNCs also have a stern connection with the powerful forces within the nation itself. Therefore, we can find a shift in power in this case. These scenarios usually arise in under developed and developing countries, wherein the economic growth relies on such MNCs and the governments pay heed to their needs and bestow the MNCs with some level of autonomy. This might include allowing them MNCs to form a monopoly in an industry. When these corporate giants take advantage of the autonomy given to them, a point is reached where they overpower the government and this is the point where "power shift" essentially occurs.

So for a power shift to occur there are factors such as scale of the MNC, economic factors of the country they are located and the overall governance which determines the level of autonomy to be provided to the MNCs.

Hope this helps. Do hit the thumbs up. Cheers!


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