Many developing countries have become increasingly activist toward multinational corporations in recent years. A number of governments have significantly altered the national regime for foreign direct investment (FDI) in order to shift ownership and control toward the host country. The national regime for FDI is the set of rules, regulations, and behavioral norms under which foreign enterprises are expected to operate. Foreign investment regime change can occur in a number of ways (formal expropriation, cancellation of contracts or concessions, alteration of taxation and royalty formulae, limitations on profit repatriation, requirements of local equity participation, etc.) that affect the operational autonomy and financial returns of the foreign firm. This paper will present a theory to explain one aspect of foreign investment regime change: the formal nationalization or expropriation of foreign-owned subsidiaries operating in natural resource extraction.

The traditional relation between richer and poorer countries, whereby the former exported manufactures and the latter exported primary products, has been undergoing an accelerating transformation in recent years. Developing countries are emerging as serious competitors in the world economy in a widening range of manufactured products, and increasing industrial exports is one of the highest foreign-policy priorities of their governments. At the same time, demands for import restrictions have been increasingly heard in the older industrial countries. The result is that bilateral bargaining to regulate trade and market shares has become a common but understudied element of the North-South diplomatic agenda. Despite all our recent discussion of the international economic order, our knowledge of this type of bilateral conflict is quite sketchy. Industrial trade issues touch several often-conflicting policy objectives of the country involved, including employment and growth, price stability, debt servicing, domestic political power and stability, and the strength of bilateral political ties. Latin American countries and the United States have historically been mutually important as trade partners, and some

Self-reliance is a logical prescription of Latin American dependency writers and a great many other contemporary critics of the international economic and political order. It is based on assumptions and values shared by contemporary critics, employs the same definitions of central concepts, and most important, identifies specific policies designed to eliminate the bases of dependence and exploitation that critics hold responsible for a distortion of the development process throughout much of the Third World. Despite the significance of self-reliance for dependency and other critical writers, it is rarely defined and even less frequently examined systematically. As a result, self-reliance has too often been dismissed as merely part of the ideological jargon that necessarily accompanies discussions of the new international economic order.

Neo-functionalism ascribes a dynamic role to interest groups in the process of integrating pluralist communities. By participating in the policymaking process, interest groups are expected to develop a stake in promoting further integration in order to acquire economic payoffs and additional benefits from maintaining and stimulating the organization through which certain demands can be articulated and goals attained. This implies that in the integration process interest groups have an instrumental role to play in the maintenance of the system; and that by virtue of their participation in the policy-making process of an integrating community they will “learn” about the rewards of such involvement and undergo attitudinal changes inclining them favorably towards the system. Thus, they acquire an interest in seeing the system's perpetuation, and the policy and decision makers acquire an interest in being responsive to interest groups' demands. What is implied overall is that actors' loyalties will shift towards those decision makers in the systems best able to reward them.