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Keohane and Joseph S. : Harvard University Press, Copyright © 1970-71 by the President and Fellows of Harvard College. The state-centric paradigm makes three important assumptions which we challenge. First, it assumes that states are the only significant actors in world politics. ' 3 Second, it assumes that states act as units in pursuit of the national interest. Third, it assumes that domestic interests only affect international politics through foreign policy channels. Intersocietal interactions (between national societies) are relegated to the 'environment' of interstate politics.

His findings show that foreign manufacturing investment (based on the automobile sector) often occurs in countries which provide unlimited access to foreign firms and non-discriminatory intervention. Other writers have preferred to analyse the response of states to foreign multinationals in terms of competition, collaboration or confrontation. Lehmann, for example, argues convincingly that, in the area of automobile manufacture, three European responses to the Japanese challenge have been competition in Germany, confrontation in France, and collaboration in Britain.

1 Government options for the automobile industry: the treatment of foreign and domestic automobile producers in the postWWII period (1945-89) Access granted by the nation state to foreign firms Unlimited Support provided by Discriminatory the state for domestic Non-discriminatory firms West Germany Limited France Britain United States (1945-81) United States (1981-9) Source: Reich, 1989, p. 553. own multinationals at home, which can affect the 'investment climate'. 34 The US polity, facing an incursion by Japanese multinationals beginning in the late 1970s, divided into protectionist and liberal camps.

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