ONE OF THE most contentious issues in globalization is the international social responsibility of investors--mainly multinational corporations (MNCs)--in industrialized democracies. To be sure, the debate over how (and if) these investors can simultaneously pursue profits and global public goods has a long and contentious history, as anyone who remembers the publication of Richard Barnett and Ronald Muller's Global Reach in 1974 knows. However, as the pace of globalization accelerates (yes, it is, by the way, despite 9/11), and the backlash against globalization gains political momentum, the ethical role of international private investors has again become a divisive controversy. That controversy, which generally pits the business community against an array of international non-governmental organizations, is fueled most often by specific incidents: high-profile investment projects in countries with poor human rights record, revelations of child labor and sweatshop abuses, and allegations of environmental damages attributed to foreign corporations. Public outrage, abetted by a media generally inclined against business, is often followed by calls for consumer boycotts or other political sanctions against the offending firms.
Over time, the accumulation of such incidents has encouraged a widespread perception that multinational corporations are irresponsible global citizens who care only about fattening their own bottom lines. Conventional wisdom even among the more knowledgeable public (and some academics) holds that MNCs, guided by profit-maximizing strategies, flock to authoritarian regimes capable of repressing demands for economic justice and the costs of meeting environmental standards.1
