POLST 362'3 The International Political Economy IPEof Biotechnology

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POLST 362.3 The International Political Economy
(IPE)of Biotechnology

• Lecture 13
• States and Multinational
• Corporations (MNCs)

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POLST 362 States and NGOs

• But first Context
• So far we have discussed the role of states
  vis-à-vis other states in
• International Integration
• Regional Integration
• We have found that with respect to biotech
• Regional dominates international
• But, we have ignored Non-Governmental
  Organizations (NGOs)
• WHY?

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POLST 362 States and NGOs

• NGOs have traditionally been ignored because
• the foundation of international relations is
  diplomacy State to State interaction
• While the foundation of international economics
  is commerce firm to firm interaction
• This has been affected by the rise of both
• IGOs (already discussed)
• Shifting to policy power to multilateral or
  regional governmental organizations
• Making decisions on behalf of nation-state
  members
• NGOs
• How do we categorize these groups ?

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POLST 362 States and NGOs
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POLST 362 States and NGOs

• Two Types of IPE Questions about commercial and
  civil-society NGOs
• Normative
• Should NGOs have real policy power?
• Arguments For and Against NGOs shaping the
  structure, function governance of the
  international system
• Positive
• Do NGOs have real policy power?
• To shape the structure, function governance of
  the international system
• If so, How?

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POLST 362 States and NGOs
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POLST 362 States and NGOs
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POLST 362 States and MNCs

• States and Commercial NGOs
• Multinational Corporations

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POLST 362 States and MNCs

• Multinational Corporations Gilpin Chapter 11
• The Study of MNCs
• Neo-Classical Economics very little to say!
• Firms organize and react according to market
  signals
• Comparative advantage
• Nationalistic institutional aspects largely
  irrelevant
• But also MNCs are generally oligopolistic and
  hence, not congruent with economic models (until
  NIE)
• Business Economists more to say
• MNCs driven by corporate strategy (dominate
  markets)
• But case-study based no generalizability
• Vernons Product Cycle Theory
• Dunnings Eclectic Theory
• Porters Strategic Theory
• United in their support for technology
  innovation driving MNCs
• strategic role for creating comparative advantage
  

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POLST 362 States and NGOs

• Multinational Corporations Gilpin Chapter 11
• Political Economists and the MNC
• Marxist/Radical Theories
• Firms invest abroad to exploit and preserve some
  firm-specific or monopolistic advantage
  (economic, political or tech.)
• Firm-Specific Expansion to control factors of
  production
• Creating core-periphery
• Producing uneven development
• State-Centric Interpretation
• MNCs congruent with the integrationist motives of
  the Hegemonic Power the US
• Further, MNCs are a product of the history,
  culture, and economic systems of their home
  societies

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POLST 362 States and NGOs

• Gilpin Normative Question
• MNCs should have policy power
• MNCs have actually been around for a very long
  time
• Frequently the major source of capital
  technology required for economic development
  (Economic Interpretation)
• MNCs should not have policy power
• Marxist/Radical critique
• MNCs expand creating uneven development
  controlled only by the profit-motive (beyond any
  one nations discipline)
• MNCs are simply extensions of nationalistic
  goals not truly international actors
  (State-Centric Interpretation) and, hence, not
  representative of international policy

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POLST 362 States and NGOs

• Gilpin Positive Question
• MNCs do have real policy power
• Yes, they influence the
• Structure International investment initiatives
• Function sheer volume of capital product flows
  
• Of the international system
• But it is limited
• Not as much as conventionally believed
• Nation-States still dominant actors because they
  must provide a stable foundation of consistent
  rules for the MNC to prosper
• Transatlantic regulatory regionalism with biotech

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POLST 362 States and MNCs

• States and Commercial NGOs
• Multinational Life Science Corporations

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POLST 362 States and MNCs

• Multinational Life Sciences Corporations
• Outline
• Who are they?
• Normative Question
• Should they have policy power?
• Positive Questions
• Do they have policy power?

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POLST 362 States and MNCs

• Life Science MNCs who are they?
• Upstream Agglomeration. Why?
• Monsanto (Ag)
• 1997 acquires
• Calgene (bio and seed)
• Agracetus (bio)
• Asgrow Agronomics (seed)
• 1998
• Strategic partnership with DelKab Genetics (Bio
  and Seed)
• Acquired ownership position in Delta and Pine
  Land (cancelled)
• Acquired Holdens Foundation Seeds
• 1999
• Merger with Pharmacia and UpJohn
• Monsanto spun out to only include Agriculture

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POLST 362 States and MNCs

• Life Science MNCs who are they?
• Dupont
• 1999 acquire remaining share of Strategic
  Partnership with PHB
• Aventis Agriculture Aventis Pharma
• 1997 Hoechst --- Agrevo (Shering PGS)
• 1999 Merger with Rhone-Poulenc
• Syngenta (Ag) Novartis (Pharma)
• 1998 Sandoz (Ciba-Geigy Ciba Seeds
  Northrup-King Seeds)
• 1999 Sandoz (Astra Zeneca) Syngenta

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POLST 362 States and MNCs

• Normative Question
• Life Science MNCs should have policy power
• Global Welfare Promise
• Necessary scale of RD Investment requires
  international integration which Life Science MNCs
  should have a role in
• Life Science MNCs should not have policy power
• Global Welfare Peril
• Nationalistic instruments no concern for
  transnational externalities
• Profit-Driven motive on life

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POLST 362 States and MNCs

• Positive Question
• Life Science MNCs have definitely played a role
  in the
• Structure
• Function
• Governance of the international system
• This has been achieved through
• Textbook Strategic Issues Management (SIM)
• Involvement behind the scenes

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POLST 362 States and MNCs

• Conclusions
• Life Science MNCs have definitely played a role
  in the structure, function governance of the
  international system
• Unmatched by Civil-Society NGOs!
• Lecture 14