Globalisation and development: the relevance of classical “dependency” theory for the world today

International Social Science Journal 10/2011; 61(202):467 - 488. DOI: 10.1111/j.1468-2451.2011.01786.x

ABSTRACT The International Social Science Journal, founded by UNESCO in 1949, is published quarterly in six language editions: English, French, Spanish, Arabic, Chinese and Russian. Three decades ago, on the pages of this journal, the Swiss sociologist Volker Bornschier (1980), in a summary of path-breaking empirical investigations, which vindicated much of the thinking of the social sciences from Latin America, critical of the dependency relations of the global ‘South’ from the developed ‘North’, broke a long-standing taboo in the social sciences of the developed countries by predicting that the effects of multinational corporations on economic growth and social inequality in their host countries are not entirely positive. In the 103 countries, statistically investigated by Bornschier in the period 1960-1977, the short-term effect of fresh foreign direct investment for economic growth was found to be significantly positive; but the long-term effect of multinational corporations, especially in the poorer countries of Africa, Asian and Latin America, was significantly negative. Three decades of neo-liberalism ever since, of course, were characterized by the return to the old and up to the 1970s dominant belief that open markets, foreign direct investment, and non-intervention by governments are the ideal and only receipt for long-term stable economic growth and full employment. Is Bornschier’s message still valid, three decades later, in the middle of the biggest world economic recession since the 1930s? The aim of this article is to show the basic validity of the then research design and research question with the data of today. Should we in the global “North”, most seriously affected by the current crisis, finally learn the lessons offered by the experience of the periphery (i.e. the majority of the countries of Africa, Asia, Latin America and the Caribbean, and Oceania) and the semi-periphery (i.e. the countries which are positioned between the periphery and core countries, like China, India, and Mexico) in earlier periods of development in the world economy? And should especially Europe begin to study the experiences of Latin America and should it finally learn that dependence indeed has a critical impact on the overall long-term development trends of a nation and that it tends towards the polarization of social relations, which we now witness all over Europe? Now that dependency and penetration by the multinational corporations have risen in Europe to staggering proportions, as we will demonstrate in this article? The rediscovery of the radical ‘dependency’ perspective means a fundamental break with the existing dominant thinking on the subject during the current crisis in the global economy. The logic of European Union policy making, especially, is still geared towards the ‘internal market’ and the four ‘big’ freedoms of trade, capital, services and investment (Tausch, Ghymers, 2007).

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