The Regulations and Projects of International Economic Institutions in favor of Multinational Corporations

Abstract

Producing and servicing in the countries which has attractive conditions for the investment, make the firms into multinational corporations. A decision making about investment outside of the domestic country not only creates the profit for the firms, and also contains economical and political risks. The uncertainties involved, are much more especially in the less developed countries which have low costs. Firms should take into account these uncertainties and risks when they make a decision on investment in less developed countries which have relatively low costs especially in the labor and encourages the foreign investments. In this study, we first examined the reasons why the multinational corporations invest in other countries and emphasized the importance of direct foreign investments. And then, we exposed the policies and projects of the international economic institutions appeared right after World War II, in favor of multinational corporations. The aim of this study is to examine the international economic institutions which serve for multinational corporations and expose how these institutions serve for them. In line with this purpose, we referred the projects of Multilateral Investment Guarantee Agency (MIGA) and International Finance Corporation (IFC) which are the parts of the World Bank. We explained how the IFC provides financial facilities and how the MIGA gives a guarantee for risks and uncertainties to the multinational corporations and we discussed the economic results of these activities.