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The UN and Transnational Corporations

From Code of Conduct to Global Compact

Tagi Sagafi-nejad in collaboration with John H. Dunning. Foreword by Howard V. Perlmutter

Publication Year: 2008

Are transnational corporations (TNCs) and foreign direct investment beneficial or harmful to societies around the world? Since the birth of the United Nations more than 60 years ago, these questions have been major issues of interest and involvement for UN institutions. What have been the key ideas generated by the UN about TNCs and their relations with nation-states? How have these ideas evolved and what has been their impact? This book examines the history of UN engagement with TNCs, including the creation of the UN Commission and Centre on Transnational Corporations in 1974, the failed efforts of these bodies to craft a code of conduct to temper the revealed abuses of TNCs, and, with the advent of globalization in the 1980s, the evolution of a more cooperative relationship between TNCs and developing countries, resulting in the 1999 Global Compact.

Published by: Indiana University Press

Series: United Nations Intellectual History Project Series

List of Boxes, Figures, and Tables

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pp. vii-viii

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Series Editors’ Foreword

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pp. ix-xiv

Surprisingly, no comprehensive history exists of the United Nations family of organizations. True, in the last few years, histories of the UN Development Programme (UNDP)1 and the World Food Programme (WFP)2 have been completed, to add to the two histories of UNICEF (UN Children’s Fund) produced in the 1980s and 1990s.3 And there is a new series of short and readable books ...

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pp. xv-xvi

The history of the relationship between transnational corporations (TNCs) and nation-states during the past half century and more may be characterized as a “tortuous evolution.” As organizations that control, utilize, and distribute goods and services and create jobs, wealth, and knowledge on an increasingly global scale, TNCs have an increasingly profound impact on the world we inhabit ...

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Preface and Acknowledgements

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pp. xvii-xx

Many ideas concerning foreign direct investment (FDI) and transnational corporations (TNCs) can be traced, in origin or maturation, to research or discourse within the United Nations. This book examines the impact of these ideas on policy, knowledge creation, and capacity-building in developing countries. The evolution of scholarly writings on FDI and related subjects and the role ...

List of Abbreviations

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pp. xxi-xxiv

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pp. 1-9

While the Covenant of the League of Nations referred to an open and nondiscriminatory international economic environment for investment, scholarship prior to World War II dealt primarily with trade. Foreign direct investment (FDI) was rarely studied, and the paucity of formulation of FDI theory in the early twentieth century may have been proportionate to its perceived relative ...

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1. Ideas and Institutions Relevant to Foreign Investment and TNCs Prior to World War II

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pp. 10-20

This chapter discusses the significance of foreign direct investment and the relative importance of multinational corporations before World War II. It reviews the relevant international or multilateral institutions that existed at the time and briefly describes the early scholarship and subsequent historical work that has analyzed the path, direction, and impact of American and Western ...

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2. The Early Post–World War II Era: From the Golden Years of FDI to the Incipient Rise of Economic Nationalism

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pp. 21-40

The first two decades after World War II ushered in a period of tremendous reconstruction and development—first in devastated Europe and then in developing countries that gained independence with the collapse of colonialism. Decolonization and political independence affected not only newly independent nations throughout the Third World but also the colonial powers that had ...

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3. The 1970s: Gathering Storm

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pp. 41-54

The 1970s were turbulent, marked by a series of corporate scandals, political and economic crises, a shift in the international political agenda, and the emergence of a major North-South confrontation. Several landmark events occurred in rapid succession which, taken together, framed the tenor of international economic relations for the decade and left an indelible mark on history. In August ...

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4. The Group of Eminent Persons: The Eye of the Hurricane

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pp. 55-88

The previous chapter described the turbulence that provided the context for the launch of an ambitious effort within the UN system to study the determinants and impact of TNC activity and suggest ways and means by which these activities might best serve the interests of developing countries. We discussed the flurry of activities that followed the Senate hearings, the SEC investigations, ...

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5. The Commission and the Centre: New York Years, 1974–1992

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pp. 89-123

The establishment of the commission and the centre on TNCs in 1973–1975 constituted a watershed event in the UN’s work on transnational corporations. The centre was influenced by the UN’s corporate culture as well as by its own political exigencies. Nevertheless, from the beginning, it drew extensively on the expertise and advice of scholars and a rotating committee comprised of ...

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6. From New York to Geneva: The UNCTAD Years

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pp. 124-150

The United Nations Commission on Transnational Corporations and the UNCTC underwent a metamorphosis during the early 1990s. In 1993, a major part of the UNCTC’s work was moved from New York to UNCTAD in Geneva. The work of the enterprise continued along the path established during the New York years, although its emphasis shifted further from the confrontational ...

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7. The World Investment Report Series: 1991–2007

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pp. 151-173

The UNCTC and UNCTAD have contributed in many ways to a fuller and better understanding of the phenomena of foreign direct investment and transnational corporations as they relate to development. One of the more significant contributions has been the World Investment Report, begun in 1991 and published annually since. ...

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8. Other Members of the UN Galaxy: The Constellation

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pp. 174-200

With respect to TNC-host country relations and particularly FDI and the related subject of corporate conduct, two competing institutional paradigms have persisted—one legalistic, the other moralistic. Followers of the legalistic approach have argued that in order to be effective, rules of conduct and behavior must have legal teeth. Moralists, on the other hand, have relied on less formal ...

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9. The Legacy and the Future

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pp. 201-222

This book has studied the UN galaxy’s intellectual contributions to the study of the role of transnational corporations in developing countries. It has addressed the impact of TNCs on economic development and international relations and the attendant national and international policy issues. The book began with an analysis of FDI, the main vehicle through which TNCs expand ...


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pp. 223-260

Appendix 1: Organizational Diagram of UNCTC at Its Inception, 1974

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pp. 261-263

Appendix 2: From New York (UNCTC) to Geneva (DITE): Leadership

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p. 264-264


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pp. 265-280

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About the Authors

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pp. 281-282

Tagi Sagafi-nejad is the Radcliffe Killam Distinguished Professor of International Business and Director of the Ph.D. program in International Business Administration at Texas A&M International University, Laredo, Texas. He is Professor Emeritus at Loyola College in Maryland, where he taught for nearly two decades. He received his M.A. and Ph.D. degrees from the University of ...

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About the United Nations Intellectual History Project

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pp. 283-284

Ideas and concepts are a main driving force in human progress, and they are arguably the most important contribution of the United Nations. Yet there has been little historical study of the origins and evolution of the history of economic and social ideas cultivated within the world organization and of their impact on wider thinking and international action. The United Nations Intellectual ...

Back cover

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E-ISBN-13: 9780253000699
E-ISBN-10: 0253000696
Print-ISBN-13: 9780253220127

Page Count: 312
Illustrations: 2 figures
Publication Year: 2008

Series Title: United Nations Intellectual History Project Series