Human Rights and International Political Economy in Third World Nations: Multinational Corporations, Foreign Aid, and Repression

Reviewed by: Human Rights and International Political Economy in Third World Nations: Multinational Corporations, Foreign Aid, and Repression Morton E. Winston (bio) Review of Human Rights and International Political Economy in Third World Nations: Multinational Corporations, Foreign Aid, and Repression, by William H. Meyer (Westport, Connecticut: Praeger, 1998) 220 pp. While many people believe that globalization is now inevitable, there is continued controversy concerning its effects, particularly in the sphere of human rights. Globalization’s boosters, mainly multinational corporations (MNCs), neo-liberal economists, and their political allies, argue that direct foreign investment and MNC production and marketing operations in developing countries promote economic development, which helps to protect economic and social rights. 1 MNC activities promote these human rights, according to this view, by creating jobs, improving living standards, bringing new capital and technology, and providing employee benefits such as housing and health care. As the effects of these economic benefits percolate through the societies of the host countries, a middle class is created whose members demand greater liberalization of thought, speech, and movement, better education for their children, and greater participation in government—in short, better protection for civil and political rights. Governments in these countries come to recognize that continued economic development and integration into the global economy works to the advantage of all, and sooner or later these governments become liberal democracies which respect the human rights of their citizens and seek peaceful coexistence with their neighbors. This argument proposes that economic development leads to democracy and human rights, which in turn lead to peace and prosperity for all. On the other hand, globalization’s critics, mainly environmental and human rights activists and their allies, hold that MNCs directly and indirectly contribute to human rights violations in developing countries. This view is associated with the work of economists such as Stephen Hymer and Jagdish Bagwati 2 and leftist intellectuals such as Noam Chomsky and Edward Herman. 3 The argument here is that MNCs drain resources and exploit labor from poor host countries and transfer wealth to already much richer home countries. By doing this, MNCs promote uneven development in which some countries become richer and more developed while others slip further into poverty and misery. It is claimed that MNCs often eliminate more jobs than they create in host countries by introducing new and often inappropriate technologies; they overwhelm small entrepreneurs, and, as the Asian economic crisis shows, the quixotic flow of capital across borders can destabilize [End Page 824] whole national economies and throw millions into poverty overnight. Economic exploitation and instability increases the immiseration of the local population which in turn creates an atmosphere of social unrest. Social unrest brings on political repression by security forces that are under the control of domestic ruling elites whose interests, along with those of the foreign investors, are threatened. The repression targets social reformers, dissidents, labor organizers, and human rights workers, all of whom become victims of serious human rights violations such as arbitrary imprisonment, torture, and extra-judicial execution. Thus, according to this argument, globalization deprives millions of people of the resources necessary to survive, while also triggering government repression of dissent, all in the name of profit for foreign investors. Depending upon one’s political leanings, either of these theories might seem plausible on its face. It would be nice to be able to determine empirically which one is correct. Professor William Meyer of the University of Delaware has attempted to do just that, first in an article that appeared in this journal 4 and subsequently in the book under review. Meyer developed a quantitative model in which direct foreign investment (DFI), which is used as a measure of MNC involvement in developing countries, is related to indices such as gross national product (GNP) per capita, the Physical Quality of Life Index (PQLI) of the Overseas Development Council, and rankings of different countries in terms of the level of enjoyment of civil and political rights according to the US-based human rights organization, Freedom House. His model is further developed by the inclusion of additional economic variables such as US development aid and total foreign debt and such social factors as the illiteracy rate, the infant...