Full Terms & CoChallenges of Globalizationnditions of access and use can be found athttps://www.tandfonline.com/action/journalInformation?journalCode=rglo20GlobalizationsISSN: 1474-7731 (Print) 1474-774X (Online) Journal homepage: https://www.tandfonline.com/loi/rglo20From the Politics of Development to theChallenges of GlobalizationJennifer BairTo cite this article: Jennifer Bair (2007) From the Politics of Development to the Challenges ofGlobalization, Globalizations, 4:4, 486-499, DOI: 10.1080/14747730701695745To link to this article: https://doi.org/10.1080/14747730701695745Published online: 17 Dec 2007.Submit your article to this journalArticle views: 918View related articlesCiting articles: 1 View citing articlesFrom the Politics of Development to the Challengesof GlobalizationJENNIFER BAIRYale University, USAABSTRACT During the 1970s, the United Nations was the central front in the G-77’s struggleto realize a ‘New International Economic Order’ (NIEO). A key plank in the NIEO platform wasthe regulation of multinational corporations; this objective was pursued via a draft Code ofConduct on Transnational Enterprises, formulated by a UN Commission created largely forthat purpose. Although the Code was abandoned in 1992 after 14 years of negotiations,multinationals were back on the UN agenda later that same decade. As then SecretaryGeneral Kofi Annan observed when announcing this new initiative between the UnitedNations and corporate partners, the Global Compact recognizes that a fundamental shift hasoccurred in recent years in the attitude of the UN towards the private sector. This paperexplores the rehabilitation of the multinational corporation implied in the journey from Codeto Compact as a way to understand the transformation of development discourse thatoccurred during the last quarter of the twentieth century. Focusing on the history ofcontestation that lies beneath the current orthodoxy, I emphasize that the Code of Conduct,and the broader NIEO agenda of which it was part, represented an effort by the G-77countries to define development as a struggle for recognition of the ‘sovereign equality’ ofSouthern and Northern states, and as a demand for redistribution via structural reform of theexisting order and the creation of a more equitable international regime.Durante los an˜os setenta, las Naciones Unidas era el frente central de las luchas del G-77 pararealizar un Nuevo Orden Econo´mico Internacional (NIEO, por sus siglas en ingle´s). Uno de loselementos en la plataforma del NIEO, fue la regulacio´n de corporaciones multinacionales; sebusco´ este objetivo por medio de la elaboracio´n de un Co´digo de conducta en las empresastransnacionales. A pesar de que el Co´digo fue abandonado en 1992 despue´s de catorce an˜osde negociaciones, las multinacionales volvieron ma´s tarde, a finales de la misma de´cada, aestar dentro de la agenda de las Naciones Unidas. Como lo observo´ el entonces SecretarioCorrespondence Address: Jennifer Bair, Yale University, Department of Sociology, P.O.Box 208265, New Haven, CT06520, USA. Email: jennifer.bair@yale.eduISSN 1474-7731 Print/ISSN 1474-774X Online/07/040486–14 # 2007 Taylor & FrancisDOI: 10.1080/14747730701695745GlobalizationsDecember 2007, Vol. 4, No. 4, pp. 486–499general Kofi Annan al anunciar la nueva iniciativa, el Pacto Mundial reconoce que ‘en an˜osrecientes, ha ocurrido un cambio fundamental en la actitud de la ONU hacia el sectorprivado’. Este artı ´culo explora la rehabilitacio´n de la corporacio´n multinacional implı ´cita enel recorrido del Co´digo al Pacto como una manera de comprender la transformacio´n deltema del desarrollo ocurrido durante el u´ltimo cuarto del siglo 20. Con un enfoque en lahistoria de la disputa que yace bajo la actual ortodoxia, yo hago hincapie´ en que el Co´digode conducta y la ma´s amplia agenda del NIEO de la cual era parte, represento´ un esfuerzopor el grupo de los paı ´ses en desarrollo G-77 para definir el desarrollo como 1) una luchapor el reconocimiento de una ‘igualdad soberana’ en los paı ´ses del sur y del norte y 2) unademanda por la redistribucio´n mediante una reforma estructural del orden existente y de lacreacio´n de un re´gimen internacional ma´s equitativo y justo.How did we get here? This is the question that contributors to this volume are grappling with, aswe seek to understand and explain the dramatic transformation in development theory and praxisthat occurred during the last quarter of the twentieth century. Many scholars have analyzed theInternational Monetary Fund and the World Bank as key institutions disseminating the currentorthodoxy, but this essay focuses on what might be considered the forgotten Bretton Woodsinstitution: the United Nations. While the United Nations has been effectively sidelined by itsWashington-based brethren, I examine a period in which the UN was a vibrant site for the construction and contestation of development discourse, and one in which the countries of the globalSouth, then aligned as the Group of 77 in their quest for a ‘New International Economic Order’(NIEO), sought to shape the agenda.My goal in revisiting the debates of the 1970s and 1980s is to historicize the market episteme(Da Costa and McMichael, 2007) structuring today’s development field. Although the NIEOproved to be a brief and relatively inefficacious project, it merits attention because the G-77’schallenge to the status quo, and its attempt to define and legitimate an alternative developmentdiscourse, illuminates the history of contestation that lies beneath the triumphal teleology ofcontemporary neoliberalism. I want to underscore two points about the meaning of developmentposited by the NIEO’s proponents. First, these states saw development as a struggle forrecognition, both of the sovereign equality of Southern and Northern states and of the latter’sresponsibility towards the G-77 for the structural damage caused by a global economy thatbenefited the rich nations at the developing world’s expense. Second, accordingly, a demandwas made for redistribution via reform of the existing order and the creation of a more equitableand just international economic regime.In the first section, I describe the NIEO project and the broad agenda of reform that the G-77sought to advance. The second section focuses on a particular plank of the NIEO platform,describing in some detail the effort to draft and implement the Code of Conduct on TransnationalEnterprises (hereafter Code), which was the most comprehensive and most controversial of theseveral code projects pursued during the NIEO. This analysis of the Code’s protracted negotiations extends from the early 1970s, when the UN took up the issue of multinationals, to the‘quiet burial’ (Tesner, 2000, p. 23) of the project in 1992. In the third and final section of thepaper, I briefly describe the Global Compact, a partnership between UN agencies and globalbusiness launched in 1999. As Secretary-General Kofi Annan explained when introducing theproject, the Global Compact reflects ‘a fundamental shift . . . in recent years in the attitude ofthe U.N. towards the private sector’ (Annan, 1999, para. 5). Indeed, while the Code ofConduct project proceeded from a wary skepticism about the obstacles multinationals mightDevelopment to Globalization 487pose to the developmental objectives of states, the Compact posits a ‘global public domain’(Ruggie, 2004, p.499) where corporations work alongside states as equal stakeholders in thesearch for solutions to the challenges of globalization.I focus on the rehabilitation of the multinational corporation at the UN because the trajectoryfrom Code to Compact is instructive for thinking about the broader transformation in development discourse that occurred during the last quarter of the twentieth century. Most accounts ofthis shift from ‘developmentalism’ to ‘globalization’ (Wallerstein, 2005) focus on structuralchanges in the international economy (e.g., the debt crisis of the 1980s) and the implicationsof these changes for the developing world, as the policy prescriptions of the new orthodoxybecame institutionalized in post-crisis regimes and structural adjustment programs (Callinicos,2001; Rodrik, 1994). While agreeing with the contours of this narrative as an accurate explanation of how we got here, I want to underscore the discursive dimension of the neoliberalturn by looking at the formation and dissemination of the ideas underlying the current consensus.What is the conceptualization of development that it offers, and how have alternative ways ofthinking about the pursuit of economic growth and welfare been marginalized? Through whatpractices of articulation does this development paradigm achieve coherence as an ideationalregime (Somers and Block, 2005), and how is it diffused?Thus, rather than reading the trajectory from Code to Compact as simply an outcome of structural changes occurring in the global economy over this period, I approach these UN initiativesas moments in which we can use what Gramsci called ‘the relative autonomy of the politicalsphere’ to see the production of development discourse. At stake here is not merely the roleof the multinational corporation in the development process, or the relative merits of abinding instrument versus a voluntary initiative as different means to the same end of responsiblecorporate behavior. Rather, what has been transformed in the journey from Code to Compact isthe very meaning of development itself. In sum, while the NIEO moment sought to make visibleand challenge the structural inequalities in power and wealth that the G-77 countries argued wereat the root of the developing world’s predicament, the Global Compact posits development as acollective challenge to be met by the combined efforts of diverse stakeholders, whose potentiallyconflicting interests are elided via the language of participatory pluralism.In her critique of the Global Compact in this volume, Susanne Soederberg emphasizes that byserving as the institutional home of the initiative, the United Nations ‘acts to legitimate ideologically the neoliberal norms of the world order’ (2007, p. 507). However, not problematized in heraccount is the process by which these neoliberal norms achieve coherence as an ideationalregime, and how the United Nations becomes complicit in their reproduction. In excavatingthe largely forgotten Code project, I analyze a period in which the hegemony of today’s development orthodoxy was not a foregone conclusion. The G-77’s demand for a new internationaleconomic order, embedded in the political-economic context of a bipolar international systemand enabled by the dislocations of the 1970s oil crisis, was an attempt to transform the prevailingparadigm of developmentalism into a politics of global redistribution and supranational regulation. Only by examining this discursive moment can we fully comprehend the ideologicaltransformation that underlies the present-day legitimation of the neoliberal developmentmodel at the United Nations to which Soederberg refers.Redefining Developmentalism: The New International Economic OrderThe NIEO signaled a development in the consolidation of Third World influence within theUnited Nations that began with the Asian-African Bandung conference in April 1955. Although488 J. Bairthe Non-Aligned Movement was initially focused on political issues related to decolonization,its agenda turned increasingly to economic concerns.When representatives of African, Asian, and Latin American countries met in 1964 for thefirst United Nations Conference on Trade and Development (UNCTAD), they formed theThird World caucus known as the Group of 77. The G-77’s first major success came laterthat year in the form of UN resolution 1995, which secured the institutionalization ofUNCTAD as a permanent organ of the General Assembly. In laying out the rationale forUNCTAD’s creation, the developing countries articulated several of the arguments for reformthat would reappear a decade later in the NIEO platform. They sought to make explicit thelink between political freedom and economic independence, arguing that the anti-colonialstruggle would continue until the sovereignty of Third World states over their national economies was realized.During its first decade of existence, UNCTAD scored a modest number of victories (mostnotably, agreement on the principle of a Generalized System of Preferences for developingcountry exports) but also sustained bruising losses on critical fronts, such as commodity agreements and international monetary reform (Toye and Toye, 2004). While UNCTAD II in 1968and UNCTAD III in 1972 produced little in the way of progress on the G-77 agenda, the developing countries nevertheless appeared to ratchet up their rhetoric in the early 1970s. In April1972, Mexican President Luis Echeverrı ´a proposed that the UN undertake the drafting of aCharter on the Economic Rights and Duties of States, which would include, among othertenets, the right of states to the full exercise of national sovereignty over natural resources.Events in the early 1970s, most importantly the vertiginous increase in the price of oil engineered by OPEC, created a perception on the part of several key G-77 members that the balance ofinternational power had tilted in their favor. This newfound confidence was manifest in the callby President Boumedienne of Algeria (acting in his capacity as President of the Group of NonAligned States) for a special session of the United Nations ‘with a view to establishing a newsystem of relations based on equality and common interests of all states’ (Marshall, 1994).Although the industrialized countries wanted to confine the meeting’s agenda to the issue ofenergy, they were anxious to bring the oil-exporting nations to the table, and realized thatengagement over a broader range of development issues was the price to be paid (Gosovicand Ruggie, 1976, p. 321). Their agreement to the proposed session further emboldened theG-77, and the bloc’s increasing radicalism culminated in the contentious Sixth SpecialSession of the General Assembly in spring 1974.Appropriately enough, the Session opened with a two-hour address from PresidentBoumedienne, who as an active player in OPEC aptly embodied the North’s oil crisis-inducedanxiety. In his speech, Boumedienne argued that ‘a profound reorganization of economicrelations between rich and poor countries’ was necessary to overcome the continued dominanceof ‘colonialist and imperial powers’ in the Third World. That this reorganization would featuresome element of redistribution was strongly implied by his observation that the ‘allocation ofworld resources’ was the central issue to be addressed between developed and developingcountries (Haight, 1975, p. 592).As its pie`ce de resistance, the Sixth Special Session featured the adoption of UN resolution3201, which declared the establishment of a new international economic order. This neworder would be based onequity, sovereign equality, interdependence, common interest and cooperation among all states irrespective of their economic and social systems, which shall correct inequalities and redress existingDevelopment to Globalization 489injustices, making it possible to eliminate the widening gap between all the developed and thedeveloping countries and ensure steadily accelerating economic and social development in peaceand justice for present and future generations.The NIEO platform contained 20 rather wide-ranging principles, including the inalienable rightto ‘permanent sovereignty of every State over its natural resources and all economic properties . . .including the right to nationalization or transfer of ownership to its nationals’. Resolution 3201was adopted without a vote, despite considerable reservations on the part of some developedcountries. It was followed by resolution 3202, Programme of Action on the Establishment of aNew International Economic Order. This second resolution, also adopted in May 1974, outlinedmeasures that should be taken to realize the NIEO, including reform of primary commodity tradeand regulation and control of multinationals.In December 1974, the General Assembly further registered its support for the NIEO agendaby passing the Charter on the Economic Rights and Duties of States that President Echeverriahad proposed two years earlier. Affirming that freedom of action in domestic economicaffairs is an element of meaningful sovereignty for developing countries, article 7 of theCharter declares that each state is reserved the ‘rights and responsibilities to choose its meansand goals of development, fully to mobilize resources, to implement progressive economicand social reforms and to ensure the full participation of its people in the process and benefitsof development’ (quoted in Brower and Tepe, 1975, p. 312). Unlike the NIEO resolution atthe Sixth Special Session, which was adopted without a vote, the Charter was opposed by sixdeveloped countries (including the UK and the US), with 10 more OECD countries abstaining(Chatterjee, 1991, p. 672).The themes of recognition and redistribution run throughout the text of the Charter. Article 17,for example, recognizes that: ‘International cooperation for development is the shared goal andcommon duty of all States.’ The implications of this formulation were underscored by Mexicanambassador Castan˜eda, the chair of the working group that had been appointed to draft theCharter. When presenting the document to the General Assembly, Castan˜eda emphasized thatthe rules, rights, and duties codified in the Charter were necessary for realizing the NIEO. Developed countries would also benefit from this new order, Castan˜eda argued, since the dividend ofdevelopment—international peace and stability—was to be enjoyed by all nations. However,action was required to redress global inequality and confront ‘the growing realization that thepoverty of some created the wealth of others’ (Haight, 1975, p. 596).By the end of 1974, the United Nations had approved three resolutions outlining the G-77’schallenge to the status quo: the Declaration on the Establishment of a New International Economic Order (resolution 3201), the Programme of Action on the Establishment of a New International Economic Order (resolution 3202), and the Charter of the Economic Rights andDuties of States (resolution 3281). These were followed by a fourth resolution, Developmentand International Cooperation (resolution 3362), passed in September 1975 during theSeventh Special Session of the General Assembly. These four documents sketch out the positionof the developing country coalition with regard to the NIEO agenda, enumerating seven primaryareas on which progress was necessary. First was the issue of commodity price stabilization inthe form of negotiated price floors. Second were preferential tariffs and increased access toNorthern markets for developing country manufactures. Third, the G-77 countries sought ‘anexpansion and acceleration of foreign assistance, which, in their view, was transformed frombeing charity to being compensation, a rebate to the Third World for the years of declining commodity purchasing power’ (Bello, 1998, p. 209). Fourth was alleviation of the debt burden.490 J. BairReform of multilateral institutions (chiefly the World Bank and IMF) in order to increase thevoice of the Third World was the fifth action item on the NIEO agenda. Sixth, various formsof developing country protectionism deemed necessary to promote autonomous industrializationthrough import substitution were to be legitimated, including increased control of multinationalcorporations in the Third World. The seventh and related point was an enhancement of technology transfer from the North to the South (Doyle, 1983).The NIEO combined an emphasis on the prerogative of sovereign states to pursue the developmental strategies they freely chose with the conviction that far-reaching changes in the globalpolitical economy were necessary to level the playing field between the First and Third Worlds.The G-77 maintained that the United Nations should play a leadership role in implementing thenecessary reforms, since its Charter enjoined that body to ‘promote the economic advancementand social progress of all peoples’. This claim was combined with an argument about the rightsand duties of sovereign states to aid in each other’s economic development, buttressed by a normative appeal to the moral obligation of richer countries to their less-developed counterparts(Murphy, 1983; Rothstein, 1984).While much of the G-77’s rhetoric presented the NIEO agenda as a fundamental transformation of the existing regime, the developing countries also emphasized the continuities betweenthe new order and the old. Rather than a departure from its mandate, the NIEO represented anopportunity for the United Nations to realize its objectives in a meaningful way. Furthermore,there was precedent for asserting the obligations of states towards other UN members inneed. As the G-77 underscored in its arguments for the NIEO, such a claim had been advancedby the UN Relief and Rehabilitation Administration at the end of World War II with regard to thereconstruction of war-torn Europe.Arguments for the NIEO thus evoked change and continuity simultaneously. This was madepossible by the fact that in the period after 1945, North and South alike regarded developmentalism as the dominant paradigm for understanding the relationship between economic growthand social change. Its hegemony was such that by the time the United Nations ‘declared thatthe 1970s would be the “decade of development,” the term and the objective seemed virtuallya piety’ (Wallerstein, 2005, p. 124). However, the fragility of this consensus was revealed bythe G-77’s challenge to the status quo, which mobilized the language of developmentalism incriticizing the inequities that structured the international economy, and especially the extanttrading regime. Thus, while the NIEO was carefully framed as an extension of post-war development discourse, it also revealed the limits of developmentalism because it cast into sharp reliefa fundamental tension within it—a contradiction between the universal acceptance of development as a legitimate end to be pursued by states, and profound disagreement about the meansnecessary for achieving that goal.Monitoring the activities of transnational or multinational corporations (MNCs) was a prominent issue on the G-77 agenda. Resolution 3201 declaring the NIEO called for the ‘regulationand supervision of the activities of transnational corporations by taking measures in the interestof the national economies of the countries where such transnational corporations operate on thebasis of the full sovereignty of those countries’. One group of Latin American countries hadalready taken decisive action with regard to MNCs by adopting an investment code known asDecision 24. This code, which was promulgated by the countries of the Andean Pact in December1970, restricted foreign direct investment into the signatory countries in order to avoid competition between multinationals and foreign firms.1 It also limited profit remittances and precludedcompanies with majority foreign ownership from the benefits of the Andean Common Market,which had been created one year earlier. The Andean Pact countries ‘actively sought at theDevelopment to Globalization 491UN the means to internationalize this regional code’ (Hamilton, 1984, p. 4), and in this endeavorthey were joined by Brazil and Mexico as the two most significant host economies for MNC operations in Latin America. Their efforts were furthered by events in the early 1970s, which served toheighten concerns about the role of multinationals in developing countries and generateadditional support for MNC regulation.Putting the NIEO into Action: The Code of Conduct on Transnational EnterprisesThe proximate origins of the UN Draft Code of Conduct on Transnational Enterprises can befound in complaints brought before the Economic and Social Council (ECOSOC) in thesummer of 1972 by the Chilean representative to ECOSOC (Dell, 1990). In response to theseconcerns, the Secretary General appointed a Group of Eminent Persons to study and report onthe role of MNCs (which were generally referred to as transnational corporations in UN nomenclature) in the world economy, focusing on their activities in the global South. In 1974, theGroup submitted its report in the form of a UN publication entitled The Impact of MultinationalCorporations on Development and in International Relations.One of the Group’s principal recommendations was fulfilled in December 1974 with the adoption of ECOSOC Resolution 1913, which created both a Commission on Transnational Corporations and a subsidiary body called the Information and Research Centre on TransnationalCorporations, which was to be an independent body within the UN Secretariat.2 The Centrewas expected to ‘develop a comprehensive information system on the activities of transnationalcorporations by gathering information made available by Governments and other sources, andby analyzing and disseminating such information to all Governments’. It was also charged ‘toconduct research on various political, legal, economic and social aspects relating to transnationalcorporations, including work which might be useful for the elaboration of a code of conduct’.3The creation of such a code was another of the key recommendations issued by the Group ofEminent Persons. In measured language, the Report observed thatthe self-regulatory effect of multinational corporations should not be over-emphasized. Although multinational corporations are exceedingly effective initiators and organizers of economic activity andgrowth, they are also reactors to forces and institutions which define the political environment inwhich they operate. Multinational corporations, then, must be directed towards and constrained fromcertain types of activity, if they are to serve well the social purposes of development. (UN, 1974, p. 31)In preparing its recommendations, the Group of Eminent Persons was able to draw on a growingbody of academic research on multinational corporations. Some scholars argued that multinational corporations permitted the most effective allocation and use of resources (Caves, 1974;Kindleberger, 1969), while others underscored their growing power, and predicted a future inwhich global corporations would rival nation states (Ball, 1968; Vernon, 1971). A number ofassessments were far from sanguine about the nature of MNCs and their impact on hostcountries. Multinationals were described in these various indictments as ‘monopoly capital’(Baran and Sweezy, 1966) with ‘global reach’ (Barnet and Miller, 1974), many of whichspanned sectors as ‘transnational conglomerates’ (Hymer, 1972). Collectively, this body ofwork addresses a question on the minds of diplomats, policymakers, and academics alike—the extent to which MNCs were better understood as engines of development or exploiters ofThird World resources, both human and material.Many observers agreed that the growth of multinationals warranted some kind of internationalguidelines to regulate their activity, and several argued that a carefully crafted instrument could492 J. Bairbenefit multinational corporations as much as the governments that hosted them (Davidow andChiles, 1978; McCulloch, 1977). As early as 1970, two defenders of MNCs called for the creation of an ‘agreement based on a limited set of universally accepted principles’ (Goldberg andKindleberger, 1970, p. 323). Writing later that same decade, another observed that ‘MNCs are agood thing, but need to have their international conduct regulated by explicit codes and legalsanctions’ (Bhagwati, 1977, p. 20).Expressions of support for MNC regulation could even be found within the US government.The most prominent advocate of this view was George Ball, Under Secretary of State during theJohnson administration. Although Ball believed that the most vital objective of US foreignpolicy was the global expansion of capitalism, he also acknowledged that conflicts werelikely to arise between MNCs and governments, and he assumed that resolution of such conflictswould require a regulatory framework. Specifically, he advocated that a supranational body bemade responsible ‘for chartering companies to operate in countries that are signatories of a negotiated multinational treaty consisting of established laws concerning international companies’(cited in Cohen et al., 1979, p. 9). The Nixon administration also voiced measured supportfor a code of conduct. In a statement read before the Seventh Special Session of the GeneralAssembly in 1975 (at which the US representative reiterated his country’s general oppositionto the NIEO), US Secretary of State Henry Kissinger nevertheless identified a ‘balancedcode’ (i.e., one applying to host country governments as well as MNCs) as one of the G-77’sproposals that the United States was willing to entertain.4As Kissinger’s comments suggest, from the perspective of the developed countries the regulation of multinational corporations was among the more palatable planks of the NIEO platform.Writing in the American Journal of International Law in 1978, Davidow and Chiles expressedthis view:In the past few years, developing countries have crystallized many of their demands in the form ofcomprehensive proposals to adjust global economic relationships into a ‘new international economicorder.’ In principle, the current administration supports changes in the international economic order.Although the United States has been unable to agree to many of the specific demands made by thedeveloping countries . . . certain of the proposals . . . have been viewed as acceptable. Among these isthe formulation of a code or codes of conduct covering various aspects of international commerce,particularly the activities of transnational enterprises. (p. 248)Supporters and detractors of the NIEO alike generally interpreted the creation of the Commission and Centre on Transnational Corporations as a development that advanced the G-77’sbroader agenda. According to Philippe de Seynes, Under Secretary General of the Departmentof Economic and Social Affairs, ‘[T]he decision of 1973 to create a focal point within the UNsystems for transnational corporations, must be viewed as a landmark in the development of theinstitutions needed for a New International Economic Order’ (1976, p. 15). Indeed, virtuallyevery article that was written about the Code over the next 20 years includes a similar referenceto the project’s origins in the NIEO (e.g., Fatouros, 1980; Hamilton, 1984; Muchlinksi, 1995).Typical in this respect is Nixson’s (1983, p. 84) formulation that the Code initiative ‘is best seenas part of, and as a consequence of, the demands of the L.D.C.s [less developed countries] for aso-called New International Economic Order’.At its first meeting in March 1975, the Commission decided to make the formulation of a Codeof Conduct the priority item on its agenda. Representatives to the Commission from the G-77countries outlined 21 main areas of concern for the proposed instrument to address, while theindustrialized countries countered by enumerating 23 concerns of their own, many dealingwith issues of expropriation and compensation (Feld, 1980). At its second session in 1976, anDevelopment to Globalization 493Intergovernmental Working Group was appointed to prepare a draft Code, with work on the draftbeginning in earnest in January 1977.Although some initial appraisals were highly optimistic, predicting that the Code would becompleted in a matter of months (Sauvant, 1977), disagreements between the members of theWorking Group quickly emerged. The first disagreement arose from the fundamental questionof to whom the Code would be addressed. Developed countries insisted that the Code shouldbe a two-part instrument, with one section outlining the responsibilities of MNCs towardsgovernments, and a second section prescribing guidelines for appropriate treatment of multinationals by host country governments. Developing countries objected, arguing that thiswould place MNCs and governments, symbolically or juridically, on the same level. Thiswas unacceptable to the G-77, since the Southern countries understood the Code project,and indeed the entire NIEO agenda, as an opportunity to affirm the sovereignty of thenation-state as the ontological foundation of international relations, and to secure the integrityof those states as the unchallenged principals of the interstate system. However, someindustrialized states were adamant that a two-part
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