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Transnational Corporations and Economic Development

Published online by Cambridge University Press:  11 November 2008

Colin Kirkpatrick  and
Frederick Nixson
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In 1965 Kwame Nkrumah published a book which was to exert a powerful influence on thinking about economic development.1 His thesis was that colonialism had been replaced by neo-colonialism, ‘the last stage of imperialism’, the essence of which was that ‘the State which is subject to it is, in theory, independent and has all the outward trappings of international sovereignty. In reality its economic system and thus its political policy is directed from outside’.2 He went on to argue that ‘giant financial interests’ exercised control over nominally independent states,3 with the result that foreign control was used for ‘the exploitation rather than for the development of the less developed parts of the world’.4

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The Journal of Modern African Studies , Volume 19 , Issue 3 , September 1981 , pp. 367 - 399
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Copyright © Cambridge University Press 1981

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References

page 367 note 1 Nkrumah, Kwame, Neo-Colonialism: the last stage of imperialism (London, 1965).Google Scholar

page 367 note 2 Ibid. 1968 edn. p. ix.

page 367 note 3 Ibid. p. 22.

page 367 note 4 Ibid. p. x.

page 367 note 5 Greg Lanning with Mueller, Marti, Africa Undermined: mining companies and the underdevelopment of Africa (Harmondsworth, 1979), p. 495.Google Scholar

page 368 note 1 Palma, G., ‘Dependency: a formal theory of under-development or a methodology for the analysis of concrete situations of under-development?’, in World Development (Oxford), 6, 1978;Google ScholarLeys, Colin, Underdevelopment in Kenya: the political economy of neo-colonialism (London, 1975)Google Scholar and ‘Capital Accumulation, Class Formation and Dependency: the significance of the Kenyan case’, in Socialist Register, 1978 (London); and Warren, Bill, Imperialism: pioneer of capitalism (London, 1980).Google Scholar

page 368 note 2 Leys, op. cit. ch. 1.

page 368 note 3 Cardoso, F. H. and Faletto, E., Dependency and Development in Latin America (Berkeley, 1979), p. xvi. xvi.Google Scholar

page 368 note 4 Lanning with Mueller, op.cit. p. 501.

page 368 note 5 The growing literature analysing the post-colonial state is of significance in this respect. See Alavi, H., ‘The State in Post-Colonial Societies: Pakistan and Bangladesh’, in New Left Review (London), 74, 07–08 1972, pp. 59–81;Google ScholarSaul, John, ‘The State in Post-Colonial Societies: Tanzania’, in Miliband, R. and Saville, J. (eds.) The Socialist Register, 1974, pp. 349–72;Google Scholar and Leys, Colin, ‘The “Overdeveloped” Post Colonial State: a re-evaluation’, in Review of African Political Economy (London), 5, 01–04 1976, pp. 39–48.Google Scholar

page 369 note 1 United Nations, Transnational Corporations in World Development: a re-examination (New York, 1978).Google Scholar

page 369 note 2 Nixson, Frederick and Yamin, Mohammed, ‘The United Nations on Transnational Corporations: a summary and a critique’, in British Journal of International Studies (Canterbury), 6, 04 1980, pp. 16–31.Google Scholar

page 369 note 3 See, for example, Chudson, W., ‘Africa and the Multinational Enterprise’, in Hahlo, H. R., Smith, J. G., and Wright, R. W. (eds.), Nationalism and the Multinational Enterprise: legal, economic and managerial aspects (Dobbs Ferry, N.Y., 1973), pp. 136–61.Google Scholar

page 369 note 4 Our article is largely concerned with contemporary issues that have arisen mainly in the period since political independence. This focus is not meant to imply that the evolution of the African economy and the rôle of foreign capital are not important topics, but simply that they cannot be dealt with adequately within the confines of this article. Reference can be made to: Brown, M. Barratt, The Economics of Imperialism (Harmondsworth, 1974);Google Scholar Lanning with Mueller, op.cit. especially chs. 1–3; Frankel, S. H., Capital Investment in Africa: its course and effects (London, 1938);Google ScholarHopkins, A. G., ‘Imperial Business in Africa, Part I, Sources’, in The Journal of African History (Cambridge), XVIII, 1, 1976, pp. 29–48,CrossRefGoogle Scholar and ‘Imperial Business in Africa, Part II, Interpretations’, in ibid. XVIII, 2, 1976, pp. 267–90; and Cooney, S., ‘Overseas Companies as Transnational Actors During the European Conquest of Africa’, in British Journal of International Studies, 6, 1980, pp. 154–79.CrossRefGoogle Scholar

page 370 note 1 More restricted definitions would require that to qualify as a T.N.C., a corporation must have a ‘foreign content’ (either in terms of assets, employment, or income source) of 25 per cent or more, or that income-generating assets must be owned in a minimum number of countries, usually five or six. See Hood, N. and Young, S., The Economics of Multinational Enterprise (London, 1979)Google Scholar, ch. 1, and United Nations, Multinational Corporations in World Development (New York, 1973)Google Scholar, Appendix B.

page 370 note 2 Transnational Corporations in World Development, Table III-8.

page 370 note 3 Multinational Corporations in World Development, quoted in Sauvant, K. P. and Lavipour, F. G. (eds.), Controlling Multinational Enterprises: problems, strategies, counterstrategies (London, 1976), pp. 7–28.Google Scholar

page 370 note 4 Transnational Corporations in World Development, p. 51.

page 371 note 1 Ibid. Table III-32, p. 236.

page 371 note 2 Ibid. Table IV-I, p. 288.

page 371 note 3 This distinction is not always easy to make, as much research and development expenditure is directed towards minor product changes (especially in, for example, foodstuffs, automobiles, and pharmaceuticals), rather than going into basic research or developing major new processes or products.

page 371 note 4 See, for example, M. Yamin, ‘Direct Foreign Investment as an Instrument of Corporate Rivalry: theory and evidence from the LDCs’, Discussion Paper No. 13, Department of Economics, University of Manchester, to be published in Colin Kirkpatrick and Frederick Nixson (eds.), The Industrialisation of Less Developed Countries, forthcoming.

page 372 note 1 For an excellent discussion of these issues, see Hood and Young, op. cit. ch. 2.

page 372 note 2 The study by Barnett, Richard J. and Müller, Ronald E., Global Reach: the power of the multinational corporations (New York, 1974)Google Scholar, lays great emphasis on this point.

page 372 note 3 Tugendhat, Christopher, The Multinationals (Harmondsworth, 1973)Google Scholar, ch. 6.

page 372 note 4 Transnational Corporations in World Development, pp. 41–5.

page 372 note 5 Ibid. p. 44. See also Helleiner, G. K., ‘Structural Aspects of Third World Trade: some trends and some prospects’, in Journal of Development Studies (London), 04 1979, pp. 70–88.Google Scholar

page 373 note 1 Baran, Paul and Sweezy, Paul, Monopoly Capital (Harmondsworth, 1968), p. 39.Google Scholar

page 374 note 1 Transnational Corporations in World Development, Table III-47, p. 254.

page 375 note 1 Source: ibid. Tables III-32, 33, 47, pp. 236–7 and 254, and calculations therefrom.

page 375 note 2 By way of comparison, Latin America accounted for 51·5 per cent of the total L.D.C. stock of direct foreign investment in 1973, 39·1 per cent of which was in the manufacturing sector. The lower proportion in Africa is consistent with the continent's relative under-industrialisation. For example, U.N.I.D.O. has calculated that Africa accounted for only 0·8 per cent of world manufacturing value-added in 1975, in contrast to 4·8 per cent for Latin America; 85 L.D.C.s, for which data were available, accounted for 8·5 per cent of world manufacturing value-added. See United Nations Industrial Development Organisation, World Industry Since 1960: progress and prospects (New York, 1979).Google Scholar

Care must be taken when analysing and comparing the data for Africa, especially those presented in Tables 2 and 4. It is not always made explicit in the publications consulted if South Africa is included when grand totals for ‘Africa’ are given. Wherever possible we have excluded South Africa from the discussion, but for a general analysis of T.N.C. activities there, see United Nations, Activities of Transnational Corporations in Southern Africa: impact on financial and social structures (New York, 1978)Google Scholar, and United Nations, The Activities of Transnational Corporations in the Industrial, Mining and Military Sectors of Southern Africa (New York, 1980).Google Scholar

page 376 note 1 Source: Transnational Corporations in World Development, Table III-51, p. 260.

page 376 note 2 Reproduced in Rood, Leslie L., ‘Foreign Investment in African Manufacturing’, in The Journal of Modern African Studies (Cambridge), 13, 1, 03 1975, p. 22.CrossRefGoogle Scholar

page 376 note 3 Transnational Corporations in World Development, Table III-50, p. 259.

page 377 note 1 Sources: (i) 1967 from Reuber, G. L. et al. , Private Foreign Investment in Development (Oxford, 1973)Google Scholar, Appendix A; (ii) 1975 from O.E.C.D., Development Co-operation 1977 Review (Paris, 1977), Table E. 1, pp. 208–9;Google Scholar and (iii) 1977 from O.E.C.D., Development Co-operation 1979 Review (Paris, 1979), Table E. 1, pp. 254–6.Google Scholar

page 378 note 1 The Nigerian data in particular need to be interpreted with great caution, as the recorded fall appears to be somewhat excessive. For a discussion of indigenisation programmes and related issues, see Swainson, N., ‘The Rise of a National Bourgeoisie in Kenya’, in Review of African Political Economy, 8, 01–04 1977, pp. 39–55;CrossRefGoogle Scholar Ankie M. Hoogvelt, ‘Indigenisation and Foreign Capital: industrialisation in Nigeria’, in ibid. 14, January-April 1979, pp. 56–68; Collins, P., ‘The State, Foreign Enterprise, and Local Equity Participation: the West African experience’, African Studies Association, Manchester, 18–20 09 1980;Google ScholarForrest, T., ‘Recent Developments in Nigerian Industrialisation’, in Fransman, Martin (ed.), Industry and Accumulation in Africa (London, forthcoming)Google Scholar, and Raphael Kaplinsky, ‘Capitalist Accumulation in the Periphery: the Kenyan case re-examined’, in ibid.

page 378 note 2 Rood, loc. cit. p. 22.

page 378 note 3 Transnational Corporations in World Development, pp. 68–9.

page 379 note 1 Source: World Bank, Private Direct Foreign Investment in Developing Countries (Washington, D.C., 1979), Staff Working Paper No. 348, Tables II. 3, p. 7 and s1.6, p. 70.Google Scholar

page 379 note 2 Nixson and Yamin, loc. cit. p. 18.

page 379 note 3 Kaplinsky, Raphael (ed.), Readings on the Multinational Corporations in Kenya (Nairobi and Oxford, 1978), p. 6.Google Scholar

page 379 note 4 This section considers only non-fuel minerals. Although petroleum accounts for a sizeable proportion of recent direct foreign investment in sub–Saharan Africa – see Table 2 – it is found mainly in Nigeria. See Pearson, S. R., Petroleum and the Nigerian Economy (Stanford, 1970);Google ScholarMeyer, Ronald K. and Pearson, Scott R., ‘Contributions of Petroleum to Nigerian Economic Development’, in Pearson, and Cownie, John et al. , Commodity Exports and African Economic Development (Lexington, 1974), pp. 155–78;Google ScholarTurner, T., ‘The Transfer of Oil Technology and the Nigerian State’, in Development and Change (The Hague), 7, 1976, pp. 353–90Google Scholar, ‘Multinational Corporations and the Instability of the Nigerian State’, in Review of African Political Economy, 5, 01–04 1976, pp. 63–79Google Scholar, and ‘Two Refineries: a comparative study of technology transfer to the Nigerian refining industry’, in World Development, 5, 1977, pp. 235–56.

page 380 note 1 The mining sector currently accounts for more than 10 per cent of G.D.P. and/or more than 40 per cent of total merchandise export earnings in Liberia, Mauritania, Niger, Togo, Zaïre, Zambia, Botswana, and Sierra Leone. See United Nations, Yearbook of National Accounts Statistics (New York, 1979)Google Scholar, and U.N.C.T.A.D., Handbook of International Trade and Development Statistics (New York, 1979).Google Scholar

page 380 note 2 Lanning with Mueller, op. cit. Table 8.

page 380 note 3 E.E.C. concern with the decline in mineral investments by European T.N.C.s is reflected in the renegotiated Lomé Convention between the Community and the (mainly African) A.C.P. States, which includes new provisions intended to encourage mining activities. See Kirkpatrick, C. H., ‘Lomé II’, in Journal of World Trade Law (London), 14, 4, 07–08 1980, pp. 352–9.Google Scholar A similar concern is expressed in the Brandt Commission Report, North-South: a programme for survival (London, 1980).Google Scholar

page 380 note 4 The major mining companies operating in Africa are described in Lanning with Mueller, op. cit. ch. 12.

page 381 note 1 The case of iron ore in Liberia illustrates the concentration of control within the mining T.N.C.s. Iron ore accounts for almost 80 per cent of Liberia's total export receipts, and represents about 3 per cent of world production. The main concessions are held by two T.N.C.s, in both of which the major equity shares are held by steel concerns in America, Italy, and West Germany; they have long-term supply contracts with the Liberian mines, the price being determined not on the ‘open’ market, but by negotiations between supplier and consumer.

page 381 note 2 Nankari, G., ‘Development Problems of Mineral-Exporting Countries’, World Bank Staff Working Paper No. 354, Washington, D.C., 08 1979.Google Scholar

page 382 note 1 The concept of economic rent refers to the surplus earned by factors of production over and above the minimum earnings necessary to induce their use. For a detailed discussion of the different types of rent associated with minerals, see Hughes, H. A., ‘Economic Rents, the Distribution of Gains from Mineral Exploitation and Mineral Development Policy’, in World Development, 3, 11–12, 1975, pp. 811–25.CrossRefGoogle Scholar

page 382 note 2 For a detailed discussion of price formation in the mineral sector, see Bosson, R. and Varon, B., The Mining Industry and the Developing Countries (London, 1977)Google Scholar, ch. 4. In some instances, where a country has attempted to market its mineral directly on the ‘open’ market, the T.N.C.s have sought to develop stronger contractual arrangements with supply sources over which they have greater control, thus isolating the independent producer as a supplier of last resort, onto whom the major costs of uncertainty and market instability are shifted. This type of strategy is documented by Moran, T. H., Multinational Corporations and the Politics of Dependence: copper in Chile (Princeton, 1974).Google Scholar

page 382 note 3 Faber, Michael, ‘The Fiscal Regime’, in Commonwealth Secretariat, Some Policy and Legal Issues Affecting Mining Legislation and Agreements in African Commonwealth Countries (London, 1977).Google Scholar For a detailed discussion of different types of mineral taxation, see Gillis, M., ‘Taxation, Mining and Economic Development’, in Gillis, et al. , Taxation and Mining: non-fuel minerals in Bolivia and other cosntries (Cambridge, Mass., 1978), pp. 7–26;Google Scholar and Smith, D. N. and Wells, L. T. Jr, Negotiating Third World Mineral Agreements (Cambridge, Mass., 1975).Google Scholar

page 383 note 1 Faber, loc. cit. Table 2.

page 383 note 2 Ibid. Table 3.

page 383 note 3 The reasons for state participation are complex, and in some cases the prime motivation may be economic nationalism.

page 384 note 1 The more important mines with majority government ownership are listed in Lanning with Mueller, op.cit. Table 37.

page 384 note 2 Rood, Leslie L., ‘Nationalisation and Indigenisation in Africa’, in The Journal of Modern African Studies, 14, 3, 09 1976, pp. 427–47.CrossRefGoogle Scholar

page 384 note 3 Transnational Corporations in World Development, p. 103, cites the following examples of special voting procedures that have enabled T.N.C.s to neutralise the majority-ownership of governments: the joint agreement between the Zambian Government and Anglo-American Limited, and Roan Selection Trust Limited, in respect of copper mines (1970); the Diminco agreement between the Government of Sierra Leone and the Sierra Leone Selection Trust Limited, in respect of diamonds (1970); and the joint venture between the Government of Ghana and Lonrho, in respect of the Ashanti Gold Fields Corporation (1973).

page 384 note 4 For example, the 1973 agreement between the Government of Ghana and Lonrho gave the management the following powers: utilisation and operation of gold mining equipment and facilities; employment and dismissal of employees on such terms and conditions as deemed appropriate; retention of consultants and contracting for engineering, design, construction, and development of facilities; drawing up the budget for the commencement of the project. Ibid. p. 105.

page 384 note 5 For a more favourable view of joint-venture agreements, particularly in the transfer of technology to host countries, see Collins, op.cit. The general point to be noted, however, is that T.N.C.s in all sectors of the economy demonstrate great flexibility in their responses to new legal and institutional structures.

page 385 note 1 Source: Transnational Corporations in World Development, Table III-29.

page 385 note 2 There have been important changes not only in ownership patterns but also in the financing of mining activities, with a shift from direct investment by T.N.C.s to external finance. See Radetzki, M., ‘Changing Structures in the Financing of the Minerals Industry in LDCs’, in Development and Change, II, 1, 1980, pp. 1–15.CrossRefGoogle Scholar

page 385 note 3 The reason for the willingness of the T.N.C.s to accept greater government participation is well summarised in the following extract from the Mining Journal, Annual Review, 1974, quoted in Lanning with Mueller, op. cit. p. 443: ‘At bottom, free enterprise is not dedicated to any particular form of ownership. It is dedicated to making profits, and, providing the terms are right, it should be no more difficult (and quite a lot less risky) to make profits from the sale of mining skills and management skills than from the discovery and exploitation of mineral deposits.’

page 385 note 4 The issue of increased processing in L.D.C.s is examined in Roemer, M., ‘Resource-Based Industrialisation in the Developing Countries’, in Journal of Development Economics (Amsterdam), 6, pp. 163–202Google Scholar, and Radetzki, M., ‘Where Should Developing Countries' Minerals be Processed? The Country View versus the Multinational Company View’, in World Development, 5, 4, 1977, pp. 325–34.CrossRefGoogle Scholar

page 386 note 1 Lanning with Mueller, op. cit. pp. 369–71.

page 386 note 2 A more detailed discussion of the rôle of T.N.C.s in the manufacturing sectors of L.D.C.s can be found in Colman, David and Nixson, Frederick, Economics of Change in Less Developed Countries (Oxford, 1978)Google Scholar, ch. 9, on which this section draws heavily.

page 387 note 1 Figures quoted in ibid. p. 224.

page 387 note 2 International Labour Office, Employment, Incomes and Equality: a strategy for increasing productive employment in Kenya (Geneva, 1972), p. 453.Google Scholar

page 388 note 1 I.L.O. op. cit. pp. 455–6.

page 388 note 2 See Vaitsos, C. V., Intercountry Income Distribution and Transnational Enterprises (Oxford, 1974)Google Scholar, and ‘The Process of Commercialisation of Technology in the Andean Pact’, in H. Radice (ed), International Firms and Modern Imperialism (Harmondsworth, 1975).Google Scholar

page 388 note 3 I.L.O. op. cit. p. 455. See also Kaplinsky (ed), op. cit. ch. 5.

page 388 note 4 Lall, Sanjaya and Streeten, Paul, Foreign Investment, Transnationals and Developing Countries (London, 1977)CrossRefGoogle Scholar, ch. 7.

page 388 note 5 Ibid. p. 132. Steven Langdon concluded that there were significant negative balance-of-payments effects associated with the activities of T.N.C. soap subsidiaries in Kenya; ‘Multinational Corporations, Taste Transfer and Underdevelopment: a case study from Kenya’, in Review of African Political Economy, 2, January–April 1975, p. 21.

page 389 note 1 See the evidence surveyed in Colman and Nixson, op. cit. ch. 8; also Frederick Nixson, ‘Import-Substituting Industrialisation and Economic Development: the lessons for sub-Saharan Africa’, in Fransman (ed.), op.cit.

page 389 note 2 See Vaitsos, op. cit. and loc. cit. Lall and Streeten, op. cit. p. 135 comment: ‘transnationality does not appear to have been an important aid to exporting’, and ‘foreign control does not generally seem to promote exports and may even inhibit it’.

page 389 note 3 Nayyar, D., ‘Transnational Corporations and Manufactured Exports for Poor Countries’, in Economic Journal (Cambridge), 88, 1, 1978, pp. 59–84.Google Scholar

page 389 note 4 Ibid. Table 3, p. 64.

page 389 note 5 Curham, J. P., Davidson, W. H., and Suri, R., Tracing the Multinationals: a source-book on US-based enterprises (Cambridge, Mass., 1977), p. 402.Google Scholar

page 389 note 6 For a detailed examination of the factors that influence T.N.C.s in forming export-oriented subsidiaries in L.D.C.s, see Kirkpatrick, C. H. and Yamin, M., ‘The Determinants of Export Subsidiary Formation by US Transnationals in Developing Countries: an inter-industry analysis’, in World Development, 9, 4, 1981, pp. 373–82.CrossRefGoogle Scholar One factor encouraging ‘offshore’ export activities in Africa is the ‘rules of origin’ provision in the Lomé Convention. Manufactured goods containing raw materials or value-added, which originate entirely in one (or more) A.C.P. country, or within the E.E.C., qualify for duty-free access to the E.E.C., whereas the value of materials originating outside the A.C.P.s or the E.E.C. must not exceed 40–50 per cent of the value of the finished product if tariff-exemption is to be granted. By allowing value-added in the E.E.C. to be included in the originating value-added, the ‘rules of origin’ give European T.N.C.s an advantage over non-European T.N.C.s in establishing export activities in the A.C.P. states.

page 390 note 1 Kaplinsky, Raphael, ‘Export-Oriented Growth: a large international firm in a small developing country’, in World Development, 7, 8–9, 08–09 1979, p. 833.CrossRefGoogle Scholar

page 390 note 2 K. Griffin, for example, estimated that for Latin America, over the period 1961–8, the annual average of U.S. direct foreign investment (i.e. the capital inflow) was U.S. $360·5 million, whereas the associated outflow totalled an annual average of U.S. $1,063·5; ‘Foreign Capital, Domestic Savings and Economic Development’, in Bulletin of Oxford University Institute of Economics and Statistics, 32, 2, 1970, pp. 99–112.Google Scholar The repatriation of the re-investible surplus is also a central feature of ‘neo-Marxist’ explanations of underdevelopment; see, for example, the work of Baran, P., The Political Economy of Growth (New York, 1957)Google Scholar, and Frank, André Gunder, Capitalism and Underdevelopment in Latin America (New York, 1967).Google Scholar

page 390 note 3 Hood and Young, op. cit. ch. 5.

page 391 note 1 We follow Frances Stewart, and adopt a broad definition of technology as encompassing the ‘skills, knowledge and procedures for making, using and doing useful things’; Technology and Underdevelopment (London, 1977), ch. 1, p. 1.Google Scholar Technology in this sense includes both product (the nature and specification of what is produced) and process (how a commodity is produced) technology. It also includes managerial, marketing, organisational, and financial skills, transferred not only through direct foreign investment, but also through the variety of non-equity arrangements referred to on p. 378, above.

page 391 note 2 For a brief survey of the theoretical debate, see Colman and Nixson, op. cit. ch. 10, section 10.1.

page 391 note 3 Epitomised, for example, by the work of Little, I., Scitovsky, T., and Scott, M., Industry and Trade in Some Developing Countries (Oxford, 1970).Google Scholar

page 391 note 4 A recently published survey argues that efficient factor substitutability in manufacturing is possible, and that the ‘establishment of proper factor prices is terrifically [sic] important’; White, L. J., ‘Appropriate Factor Proportions for Manufacturing in Less Developed Countries: a survey of the evidence’, in Robinson, A. (ed.), Appropriate Technologies for Third World Development (London, 1979), p. 328.Google Scholar See also Helleiner, G. K., ‘The Role of Multinational Corporations in the Less Developed Countries' Trade in Technology’, in World Development, 3, 4, 04 1975, pp. 161–89.CrossRefGoogle Scholar

page 392 note 1 Arrighi, Giovanni. ‘International Corporations, Labour Aristocracies, and Economic Development in Tropical Africa’, in Rhodes, R. (ed.), Imperialism and Underdevelopment: a reader (New York, 1970). pp. 220–67.Google Scholar

page 392 note 2 The 11 inputs are: 1 unskilled labour; (2) labour possessing a medium degree of skill; (3) labour possessing a high degree of skill; (4) labour and management with skills and know-how giving capacity to maintain equipment; (5) lower executive management; (6) top decision-making management; (7) capital embodied in machinery; (8) capital embodied in buildings; (9) working capital embodied in materials awaiting processing; (10) working capital embodied in work in progress; and (11) working capital embodied in stocks of finished goods. A. Robinson, ‘The Availability of Appropriate Technologies’, in Robinson (ed.), op. cit. p. 27. The author adds: ‘I stress this large variety of inputs because, to an industrial economist, a discussion which fastens exclusively on elements 1 and (7) is in the great majority of cases barren’.

page 392 note 3 Streeten, Paul, ‘Costs and Benefits of Multinational Enterprises in Less Developed Countries’, in Dunning, J. H. (ed.), The Multinational Enterprise (London, 1971), p. 252.Google Scholar

page 393 note 1 Helleiner, ‘The Role of Multinational Corporations’, loc. cit.

page 393 note 2 Stewart, Frances, ‘Choice of Technique in Developing Countries’, in Journal of Development Studies, 10 1972, p. 111;Google Scholar and Stewart, op. cit.

page 393 note 3 I.L.O. op. cit. p. 452.

page 393 note 4 Langdon, ‘Multinational Corporations, Taste Transfer and Underdevelopment’.

page 393 note 5 Raphael Kaplinsky, ‘Technical Change and the Multinational Corporation’, in Kaplinsky (ed.), op. cit. p. 257.

page 393 note 6 Biersteker, T. J., Distortion or Development? Contending Perspectives on the Multinational Corporation (Cambridge, Mass., 1978)Google Scholar, ch. 7. It may well be the case, however, that even though local firms use relatively more labour-intensive technologies as compared to their T.N.C. subsidiary counterparts, they are nevertheless still more capital-intensive than they would be in the absence of T.N.C.s and their associated technology.

page 394 note 1 O. Adikibi, ‘The Transfer of Technology to Nigeria: the case of tyre production technology’, in Kirkpatrick and Nixson (eds.), forthcoming.

page 394 note 2 See Biersteker, op. cit. ch. 7; Turner, ‘Two Refineries’; and Thomas, D. Babatunde, Importing Technology into Africa (New York, 1976)Google Scholar, ch. 1.

page 394 note 3 Conceptually, we can distinguish between (i) product replacement – the introduction of modern substitutes or processed variants for already existing products; (ii) product development – new products incorporating cosmetic or marketing changes to replace existing products; (iii) taste creation – the creation of a demand for products with no already existing substitute in the domestic market. See Biersteker, op.cit. ch. 7. In reality, it would be difficult always to distinguish between (i) and (ii), and (iii) is likely to become of increasing importance in the future.

page 395 note 1 Langdon, ‘Multinational Corporations, Taste Transfer and Underdevelopment’.

page 395 note 2 Kaplinsky, ‘Technical Change and the Multinational Corporation’, ch. 5.

page 395 note 3 Biersteker, op. cit. ch. 7.

page 395 note 4 Langdon, ‘Multinational Corporations, Taste Transfer and Underdevelopment’, p. 26.

page 395 note 5 See Raphael, Kaplinsky, ‘Inappropriate Products and Techniques: breakfast foods in Kenya’, in Review of African Political Economy, 14, 01–04 1979, p. 96Google Scholar, for his conclusion that we should look ‘to the wider nexus of relations between dependent peripheral udc's and the global economy, of which the presence of MNC subsidiaries is merely one aspect of a larger interrelationship’.

page 395 note 6 Transnational Corporations in World Development, p. 40.

page 395 note 7 Nixson and Yamin, loc. cit. p. 20.

page 395 note 8 Barnett and Müller, op. cit. chs. 2 and 6.

page 396 note 1 Development, according to the Brandt Commission Report, op. cit. p. 23, for example, leads to ‘self-fulfilment and creative partnership in the use of a nation's productive forces and its full human potential’.

page 396 note 2 Transnational Corporations in World Development, ch. iv.

page 396 note 3 Nixson and Yamin, loc. cit. p. 27.

page 397 note 1 Lanning with Mueller, op. cit. pp. 444–5.

page 397 note 2 The following quotation is representative of this view: ‘In principle, the simplest way to capture all rents is for a mineral economy government to own and run the mines. But few mineral economies currently possess the managerial, technical and marketing skills needed to substitute fully and efficiently for the transnational corporations that have historically dominated the industry. As these skills are developed over time, governments are likely to participate increasingly in mining. Such participation speeds the necessary accumulation of knowledge about the industry, the nation's mineral reserves, and its long-term needs and capacities for mineral exploration and exploitation… Meanwhile the role of transnational corporations is likely to remain significant in most countries.’ World Bank, World Development Report, 1979 (Washington, D.C., 1979), p. 104.Google Scholar

page 397 note 3 Sklar, Richard L., Corporate Power in an African State: the political impact of multinational mining companies in Zambia (Berkeley and Los Angeles, 1975)Google Scholar, and ‘Postimperialism: a class analysis of multinational corporate expansion’, in Comparative Politics (Flushing, N.Y.), 10 1976, pp. 75–92.Google Scholar

page 398 note 1 This interpretation is advanced by Fortin, C., ‘Third World Commodity Policy at the Crossroads: some fundamental issues’, in IFDA Dossier (Nyon, Switzerland), 15, 01–04 1980, pp. 77–87.Google Scholar The alternative approach is to formulate policy from the perspective of a self-reliant strategy of development, although perhaps this concept raises as many questions as it answers.

page 398 note 2 Langdon, Steven, ‘The State and Capitalism in Kenya’, in Review of African Political Economy, 8, 01–04 1977, pp. 90–8CrossRefGoogle Scholar, and ‘Multinational Corporations and the State in Africa’, in J. J. Villamil (ed.), Transnational Capitalism and National Development: new perspectives on dependence (Hassocks, Sussex), pp. 223–40.Google Scholar

page 398 note 3 Langdon, op. cit. p. 229.

page 398 note 4 Ibid. pp. 237–8. See also Godfrey, M. and Steven, Langdon, ‘Partners in Underdevelopment? The Transnationalisation Thesis in a Kenyan Context’, in Journal of Commonwealth Comparative Politics, XIV, 03 1976, pp. 42–63;CrossRefGoogle Scholar and Sunkel, O., ‘Transnational Capitalism and National Disintegration in Latin America’, in Social and Economic Studies (Mona, Jamaica), 22, 1, 03 1973, pp. 132–76.Google Scholar

page 398 note 5 Cardoso and Faletto, op. cit. pp. xvi.

page 399 note 1 Lanning with Mueller, op. cit. p. 501: ‘As the partners in this alliance [between the T.N.C.s and the state bourgeoisie] are wedded by political and economic self-interest to the maintenance of free trade, the economic outlook for Africa is generally one of continuing dependence and underdevelopment, with its chances of meaningful development undermined by the activities of the international mining companies.’ See also Langdon, S., ‘Multinational Firms and the State in Kenya’ in I.D.S. Bulletin (Brighton), 07 1977, p. 237:Google Scholar ‘Thus the post-colonial changes in such countries as Kenya are resulting in underdevelopment in the sense of ongoing movement away from the objectives of a more valid definition of development. M.N.C. penetration, and the M.N.C.-state symbiosis that supports it, can he seen as the basis of this underdevelopment’.

page 399 note 2 Cardoso and Faletto, op. cit.; and F. H. Cardoso, ‘Dependent Capitalist Development in Latin America’, in New Left Review (London), 74, July-August, 1972.

page 399 note 3 For example, Bill Warren, ‘Imperialism and Capitalist Industrialisation’, in ibid. 81, September-October 1973, pp. 3–44, and Imperialism: pioneer of capitalism, chs. 1 and 7.