Foreign Capital Dependence and Development: A New Direction

Political Economy, Capability Development, and Fundamental Cause: Integrating Perspectives on Child Health in Developing Countries

“…As economic transactions cross national boundaries at an ever-increasing rate, the growing wealth and power of TNCs undermine the power of the state and marginalize the state as an actor (Evans 1997). TNCs gain control in economic, political, and social domains and limit the capacity of periphery states to implement policies in their own long-term interests (Kentor and Boswell 2003). For example, periphery countries are under intense pressure from international funding agencies and TNCs to privatize their healthcare systems.…”

“…In this way, dependence on exports and foreign capital allows foreign investor countries to co-opt local politics and pursue their own interests. On the other hand, periphery countries with more diversified distributions of export production and trade partners allows them to better maintain their autonomy (Kentor and Boswell 2003). Thus, variation in periphery states' relative levels of dependency and strength in global trade networks may, in part, account for their varying power to provide the capabilities people need to ensure good health.…”

Stagnating Industrial Employment in Latin America

“…Foreign trade composition, in which peripheral countries export raw materials and resource-based products and import manufactured goods, is an indicator of dependence on the core (Kentor & Boswell, 2003). Therefore, dependency theorists view open trade as detrimental to the periphery and favor protectionism or disengagement as better for industrialization (Cardoso & Faletto, 1979).…”

“…In particular, manufacturing imports, exports to the United States (as the dominant core country for the region; see Kentor & Boswell, 2003), agricultural and resource-based exports, and inward FDI should all be negatively associated with industrial employment. Therefore, declining industrial employment could be driven by an increase in these measures of dependency theory.…”

Indices of Trade Partner Concentration for 183 Countries

“…This dependency literature on export partner concentration extended into the 1980s and 1990s. More recently export partner concentration has been used in studies of growth (Kentor and Boswell 2003), inequality (Lee et al 2007), and the environment (Shandra 2007). Import partner concentration has appeared in the literature much less frequently (e.g., Gasiorowski 1985;Ragin and Bradshaw 1992), but we include it in our calculations for completeness.…”