It should be clear by now that the issues of partnership in development go far beyond economics and industrial competition. The dilemmas we noted in chapter 4 for states seeking equally desirable but mutually exclusive goals can only be resolved over time and with political choices of priority at each step on the way. But political choice inextricably involves society. Who benefits? Who wins? Who loses? Who takes on new risks or sheds old ones? Whose opportunities to make choices are enlarged, or restricted? These are always key issues in political relationships. Bargaining between multinationals and their host governments is no different. For our purposes it is necessary to try to sort out which consequences for different social groups have resulted primarily from the state–firm relationship rather than from other factors. That is what we attempt in this chapter, focusing particularly on the issues that affect organised labour and the development of skills.

An example shows the analytical problems that come with the question ‘who benefits?’. Recall Firestone's moves to reduce its exposure to risk in Kenya. The controlling interest in the tyre factory was bought by a small group of local investors sufficiently influential to be able to persuade the authorities to make a special case. The ‘concessionary’ negotiations were limited to a chosen few: the state development finance institution was not permitted by the authorities to increase its holding though this would have required a smaller equity transfer to achieve local majority control. Kenya increased output and workers got new jobs. Local investors were awarded a rich ‘prize’.