INTRODUCTION There have been many studies of the ways in which governments! may directly affect the activities of multinational enterprises (MNEs). Few, however, have attempted to analyze the extent to which outward or inward direct investment - through its effects on the economies of investing or recipient countries - has led governments to modify their existing economic objectives and strategies, or, indeed, of the way in which governments, themselves, have sought to influence the level and pattern of MNE activity, as part of a package of policy instruments designed to advance a broader set of economic and/ or social goals.