Dependent development in the twenty-first century

A key but neglected dimension of developmental industrial policy is the formation of a mutually beneficial relationship among developing country governments, domestic capital and multinational corporations, or what Peter Evans has termed ‘dependent development’. Such relationships were a prominent feature of the growth trajectories of Latin American and East Asian industrialisers in the 1960s and 1970s. This article argues, however, that dependent development is a historically specific phenomenon; it is much harder to achieve for developing countries attempting industrial development after the 1990s, when multinationals have significantly more power and autonomy in relation to the state in developing countries, as a result of domestic liberalisation and changes in the international regimes of trade and investment. These power imbalances have persisted in the last two decades. The article examines the institutional relationships among states, multinationals and domestic firms after neoliberal economic reform and globalisation, and demonstrates the substantive constraints of multinationals in executing externally oriented industrial policies in a most likely case, that of India.