Eclectic Approach In International Relations

Two dimensions are now added to the practice of IPE apart from the usual bilateral and interstate bargaining there is now diplomatic relations and trade between states and firm, and between firms (Strange, 1991; p.43). The relations between states and firms have transformed in a primary manner in the preceding century (Gilpin, 1993; p.21). Today, companies are leading global economic competition changing the face of diplomacy. It is no longer bilateral (Strange and Stopford 1991; p.7). This revolution in international relations has created a triangular and powerful interdependency between states and multinationals (Gilpin, 1993; p.29). A triangular diplomacy is a new form of diplomacy that entails diplomatic relationship between governments

The structural changes are brought about by various factors. The historicist-dialectical approach incorporates the crucial issue of power that attributes to “the distribution and mechanism of power” (Cox.1976; pp.192, 193, 195). Therefore, the nature of the international system is affected by “distribution of power between social forces” (Leysens, 2008; p.36).

With the change in the global structure automatically without order and supremacy states are drawn into the triangular diplomatic relations with new intricate rules. This new approach to diplomatic relations and increased competition for global markets alters the functions of the state. Now it has become more challenging for states to manage and support the private sector and at the same time to maintain social welfare coherently. MNCs indirectly impacts states’ affairs to the extent of rearranging its structures.

In most circumstances national states are caught between the desires to compete for the world market shares by embracing new trade concepts such as FDI and at the same time decrease dependence on foreign investors and increase support for local firms (Strange and Stopford, 1991;

203-218).The pursuit of power by the states previously was a way of defending itself from intrusion by other countries and not for economic reasons only. So who is calling shots in global and states’ ‘economic and political affairs, and how do multinationals influence them? Analysis of the case of the US MNC 's impact on US policies will assist in finding the answers to the questions above. US multinationals have attained both economic and political power that they use to dictate terms and operating conditions to the host countries especially those that are economically weak. US MNCs and big firms tend to influence their government by lobbying policy