This essay tells the story of a recent failed venture in international economic cooperation-namely, the proposed Multilateral Agreement on Investment, or MAI. The MAI would have embodied a concerted set of measures to push forward the liberalization of foreign direct investment. Negotiations to prepare it were launched in 1995 by the member governments of the Organization for Economic Cooperation and Development, the OECD. These negotiations were brought to a close towards the end of 1998, and there is no prospect that they will be renewed. The MAI is now dead.
This failure had not at all been expected. It resulted form a combination of internal doubts and hesitations on the part of OECD governments and strong outside opposition brought to bear by non-governmental organizations of various kinds. The MAI became politically non-viable. David Henderson outlines the course of these events, accounts for the breakdown of negotiations, examines the arguments brought to bear, weighs the implications of failure, and suggests the lessons to be drawn. He places this remarkable and disturbing episode in perspective.