assimilation (Warren, 1973, 1980). Elsewhere development could be said to
require more, not less, foreign capital (Emmanuel, 1974, 1976). Nor has the
introduction of capitalism necessarily held countries back economically.
For example, in Zambia, Saudi Arabia and Sri Lanka it is the capitalist sec-
tors that have developed, when foreign investment has been used to produce
for world capitalist markets. In some African countries, capitalism ‘has
accomplished more than dependency theory allows’ (Leys, 1996, p. 121).
What has held back development is lack of know-how, enterprise, capital
and pre-capitalist social and political traditions (Nove, 1974). Relations
between centre and periphery are non zero-sum games, so ‘economic rela-
tions with the metropolitan centre may act as an enormously powerful
engine of growth in the periphery’ (Cohen, 1973, p. 217). Foreign capital,
even with a net outflow, can add to the total of domestic capital by the mul-
tiplier effect of investment-generated local payments such as wages, taxes
and purchases of local supplies (Ray, 1973, pp. 13–18). Developing coun-
tries can also reduce their dependency by using bargaining strength derived
from the developed economies’ dependence on them (Philip, 1990, p. 497).
An analysis of data on 30 tropical African countries in the middle and late
1960s found measures of dependency unrelated to economic performance
variables. In the mid-1960s African countries with high ratios of exports
and imports to GNP and high levels of foreign capital had the best economic
records. However, when this research made a distinction between ‘market
dependency’ (a generalized feature of the international capitalist system)
and ‘economic power dependency’ (meaning an economy is conditioned by
the decisions of individuals, firms and agencies in metropolitan centres) it
found the latter negatively related to economic performance (McGowan,
1976; McGowan and Smith, 1978, pp. 192–221).
The economic significance of independence
The view that formal political independence had not substantially modified
the relations of domination and exploitation between the capitalist imperi-
alist powers and the new states of the Third World received a major
challenge in the early 1970s by the British Marxist Bill Warren (1973,
1980). He questioned whether the evidence corroborated ‘the neo-colonial
thesis that political independence has meant only marginal changes in the
economic ties between ex-colonies and their former masters’ (Warren,
1980, p. 171). Although not denying that imperialism persisted ‘as a system
of inequality, domination and exploitation’ (1973, p. 4) Warren challenged
94 Understanding Third World Politics