All three authors, Fieldhous, Tarzi, and Wolf discuss the important role of the host government in relations with MNC's (in particular LDCs or Least Developed Countries). Fieldhouse does an excellent job of distinguishing between the imperialistic utility and extractive corporations that were prevalent in the 1980's (which are becoming more and more nationalized and controlled) to the current manufacturing MNC's that are less threatening to host country sovereinty, IF (and this is a BIG IF) the host government has the ability and the willingness to (in the words of Tarzi) turn potential power into actual power.
Wolf discusses what governments cannot do and what they need to do in order to provide for and protect their citizens in the new global economy. Wolf also discusses why governments fail, flaws of good governments and the disastrous effects that are caused by bad governments. According to Wolf, "Bad governments are a huge obstacle to gaining the benefits of economic integration across borders. Indeed they are the most important obstacle of all" (Wolf, 76). Interestingly, Fieldhouse makes the same argument. Fieldhouse would say that in the end, it is up to the host government to decide and control, but the real question is whether the government can "match up to its assigned role" (Fieldhouse 175). If the officials are too corrupt to consider national interest or lack the neccessary knowledge and policy-making skills then sovereignty does not help defend host governments from the "superior cunning" of MNC's (Fieldhouse 179).
Tarzi is right to argue that for a host government to change potential power (relative bargaining power) into actual power (hosts ability and willingness to exercise bargaining power in order to have more favorable terms from foreign firms)it depends on the level of the host government's expertise and the type of FDI among other dependent variables.
Therefore, when pointing fingers at the IMF, MNC's, and hegemons such as the US, we cannot forget the role of the host government, its sovereignty and its ability to make effective policy and successful bargains with MNC's.
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I think you make excellent points when discussing MNCs and host countries. However the host country almost always will face some sort of prisoner’s dilemma when dealing with the MNC. If they try to be firm with regulations and taxation they risk having the MNC leave for another country and lose a significant number of jobs and revenue. However if host countries are weak the MNC will take advantage of that country and its resources. A tough situation for the host country either way.
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