126 International Investment and Colonial Control: A New Interpretation
nonetheless argue (1) that economic characteristics of cross-border investments
had certain systematic effects on the use of force against host countries and on
cooperation among home countries, and vice versa and (2) that the evidence tends
to support the validity of this first assertion.
The most direct purpose of this article has been to bring new analytical and
empirical evidence to bear on an old debate about the relationship between foreign
investment and colonialism. In the interests of analytical clarity, I refrained both
the questions and the proposed answers. In so doing, I pointed out that the relevant
question is not whether “the economy mattered” but under what circumstances
economic considerations had predictable effects on political outcomes. I believe
that the hypotheses put forth help clarify the analytical issues and the evidence
adduced provides at least some indication of the plausibility of my arguments.
Apart from its relevance to explaining the relationship between colonialism
and foreign investment, one potential implication of my argument has to do with
change over time. It may indeed not be coincidental that the movement away
from colonialism has been correlated with a continual decline in the importance
of primary investment in the Third World and an increase in sovereign lending
and foreign direct investment in manufacturing. The causal arrows may go in
either direction, or their direction may vary from case to case. Nonetheless, there
appears to be a strong historical association between colonial rule and foreign
investment in primary production for export and between independence and foreign
borrowing and foreign investment in manufacturing....