Domestic Politics and Foreign Investment: British Development of Mexican Petroleum

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1987

Authors

Brown, Jonathan C.

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Abstract

How do host country politics affect foreign business interests? Tbis question is so complex that, while recognizing some influence, historians still concentrate on profit-making and market forces in order to analyze foreign investment, the growth of the firm, and the economic performance of less developed countries. Those concerned more with the reasons for business expansion at the source rather than at the destination seldom consider the relationsbip between host-country politics and foreign investment. Others who do ponder the relationship may emphasize either the domination of local elites by foreign interests or the role of the state in promoting development. Scholarly analysis of the 'politics of modernization' most often centers on economic policies. The tendency is to assume that economic forces in and of themselves elplain economic performance -whether one sees that performance in positive or pathological terms. The competition for domestic politicial power becomes a mere by-product of the profit-making (or capital accumulation) of the foreigners. In other words, economic policy is mistaken for politics. The first represents the government's priorities for the spending of scarce public capital and the other, potitics, is the struggle among power contenders to gain and maintain control of the government.

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