Corporate Preferences and Public Policies: Foreign Aid Sanctions and Investment Protection

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Abstract
Since 1959 Congress has tried to protect U.S. direct foreign investments from expropriation by quite explicit amendments to various foreign assistance acts. Probably the most important of these legislative efforts, the Hickenlooper amendment, the Gonzales amendments, and the effective repeal of the Hickenlooper amendment, are contradictory and have been applied only sporadically. By developing testable hypotheses that can accurately and parsimoniously predict these varied legislative and diplomatic policies, this article attempts to demonstrate the value of a radical analysis of American foreign policy. After those hypotheses are evaluated, they are compared with propositions derived from pluralist and bureaucratic analysis. Finally, the policy history is reconsidered to show that changes in the external environment, particularly the rise of economically powerful nationalist regimes, have let to a significant evolution in the policy preferences of large multinational firms.

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