Multinational Corporations and Business Negotiation under the Monroe Doctrine: Lord Cowdray and Oil Politics in Colombia

Marcelo Bucheli
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Marcelo Bucheli: U of Illinois at Urbana-Champaign

Working Papers from University of Illinois at Urbana-Champaign, College of Business

Abstract: The bargaining power of a multinational corporation negotiating with a poor country in the extractive sector can be determined by the host country's local politics, the relationships between the host country and the multinational's home country, and the power of other countries. This paper explores the negotiations for oil concessions between the British oil firm Pearson and Son (owned by Weetman Pearson-Lord Cowdray) and the Colombian government in 1913. Despite the mutually beneficial terms of the contract negotiated between the company and the government, the negotiations failed. I argue that the collapse of the negotiations was a result of the company's little understanding of Colombia's domestic politics (this was the Pearson's first experience at negotiating in a poor country with strong legal political parties), its underestimation of United States opposition to Pearson's encroachment into "US territory," and a narrow-minded British policy of protection of British investors abroad.

Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:illbus:07-0115

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