International business (IB) and government relations involve the interaction of at least four major groups of players, namely, multinational business enterprises, their home governments, host governments, and domestic business firms in the host countries. And the players in each of these groups have their own goals and behavior patterns that have been changing over recent decades.

In this chapter, I have chosen to focus on the host country policies of the developing countries toward inbound foreign direct investment (FDI) for two reasons. One reason is that my entry into the IB education field some forty years ago was from a background of working for the United Nations on economic development advisory missions in Brazil, India, and Bolivia. And because of this background and continued assignments in the Philippines, Mainland China, and other developing countries, I have been sensitive to the need for managers and multinational enterprises to enlarge their understanding of the thinking and the motivations underlying the host country policies toward inbound FDI of the less developed countries.

A second reason is that I expect the developing countries to have a much greater business attraction for multinational enterprises during the twenty-first century than they have had in the recent past. The developing countries have most of the world's population, and many have been achieving relatively high growth rates. As incomes rise, effective demand rises even faster for the kinds of advanced products that can be supplied by international firms.