IntroductionSince its publication in 1990, Michael Porter's book, The Competitive Advantage of Nations, has generated much interest. The book's main analytical tool is the competitive advantage diamond (Figure 1). This model is based on four “determinants” specific to each country and two external variables. Porter's four determinants and the two external forces interact in a “diamond” of competitive advantage, with the nature of a country's international competitiveness depending on the type and quality of these interactions. However, because it is fundamentally a country-focused model of international competitiveness, the diamond theory is criticized by many international trade scholars. Dunning and Rugman ¬, ¬¬ point out that the influence on competitiveness of bilateral foreign direct investment (FDI) as well as the influence and interference of foreign governments on trade and investment have been neglected. Rugman and Collinson also evaluated the model and identified eight areas requiring feedback. This essay will examine Rugman and Collinson's critiques of Porter's model, focusing on three main areas: the role of FDI, the influence of foreign governments, and multinational corporations (MNCs), before examining the the evolution of the Porter diamond with examples specific to each country. CRITICISM OF PORTER'S DIAMONDThe eight areas identified for comment and evaluation, namely: the model is limited because it is based on ten countries, either industrialized or members of a triad; government is of crucial importance and was neglected by Porter; chance, although critical, is difficult to predict or avoid; Porter's model should be applied in terms of company-specific considerations and not in terms of national advantages; Porter delineates only four distinct stages of national competitive development: Porter asserts that only outward FDI is useful for creating competitive advantage, and that inward foreign investment is never the solution to a country's competitiveness problems; Porter considers dependence on natural resources insufficient to create a competitive position on a global scale; the model does not sufficiently take into account the role of multinationals. FOREIGN DIRECT INVESTMENT FDI tends to focus on opportunities within the same continental region. This often reflects attempts by multinationals to create regional networks starting close to their home base. A major conceptual problem with Porter's model is due to the narrow definition it applies to FDI. Porter only defines outward FDI as “valuable for creating competitive advantage” and that inward FDI is “not entirely healthy”. It also asserts that foreign subsidiaries are importers, which constitutes a source of comparative disadvantage. .