Foreign investiment in socialist Cuba: Significance and prospects

In February 1982, Cuba’s Council of State approved legislation that authorized some forms of foreign investment in the island. The legislation was largely ignored by foreign business that for nearly a decade showed scant interest in investing in Cuba. However, in the 1990s, foreign investiment in socialist Cuba has increased rapidly. The first part of the article gauges the economic significance of foreign investment in the context of the financial needs of the country. The second part touches on a number of issues that have a bearing on the further growth of foreign investment in Cuba. The article concludes with some general observations on the impact of foreign investment on the Cuban economy and prospects for the future. Jorge F. Pérez-López is an international economist with the Bureau of International Labor Affairs, U.S. Department of Labor. His writings on international economics issues— especially on the Cuban economy—have appeared in professional journals and several edited volumes. He is the author ofThe Economics of Cuban Sugar (University of Pittsburgh Press, 1991),The Cuban Second Economy: From Behind the Scenes to Center Stage (Transaction Publishers, 1995), and editor and contributor ofCuba at a Crossroads (University Press of Florida, 1994). He received his Ph.D. in Economics from the State University of New York at Albany. The views expressed in this article are those of the author alone.     

Development as institutional change: The pitfalls of monocropping and the potentials of deliberation

Development theory has moved from a single-minded focus on capital accumulation toward a more complex understanding of the institutions that make development possible. Yet, instead of expanding the range of institutional strategies explored, the most prominent policy consequence of this “institutional turn” has been the rise of “institutional monocropping”: the imposition of blueprints based on idealized versions of Anglo-American institutions, the applicability of which is presumed to transcend national circumstances and cultures. The disappointing results of monocropping suggest taking the institutional turn in a direction that would increase, rather than diminish, local input and experimentation. The examples of Porto Alegre, Brazil, and Kerala, India, reinforce Amartya Sen’s idea that “public discussion and exchange” should be at the heart of any trajectory of institutional change, and flag potential gains from strategies of “deliberative development” which rely on popular deliberation to set goals and allocate collective goods. Peter Evans teaches in the Sociology Department at the University of California, Berkeley, where he holds the Marjorie Meyer Eliaser Chair of International Studies. He is currently exploring the role of labor as a transnational social movement. His earlier research has focused on the role of the state in industrial development, an interest reflected in his bookEmbedded Autonomy: States and Industrial Transformation (Princeton University Press 1995). He is also interested in urban environmental issues, as indicated by the recent edited volume,Livable Cities: Urban Struggles for Livelihood and Sustainability (University of California Press 2002). I would like to thank the editors, Atul Kohli, Dani Rodrik, and Anne Wetlerberg for their valuable comments and suggestions. Remaining analytical and empirical errors are, of course, my own. For an earlier effort (in Portugese) to make this argument, see Evans 2003.     

Trade and development policies in Colombia: Export promotion and outward orientation, 1967–1992

As developing democracies implement programs of economic adjustment and trade liberalization, we need to examine the relationship between the state and society in the making of foreign economic policies. This article examines trade and development policies in Colombia, one of Latin America's more institutionalized democracies. Colombia was one of the first countries in Latin America to begin a major reorientation away from full dependence on ISI as a strategy of development. The research shows that domestic political institutions and actors have had a decisive impact on the character and direction of foreign economic policies. The study also illustrates how state capacity for economic management is enhanced by bureaucratic insulation and institutional reform. Carlos E. Juárez is a Ph.D. candidate in the Department of Political Science at the University of California, Los Angeles. His research focuses on the politics of trade liberalization in Latin America, government-business relations in developing democracies, and comparative political economy. He was a visiting researcher and lecturer at theUniversidad de los Andes in Bogotá, Colombia from 1991–1992. For 1993–1994 he will be a visiting research fellow with the Center for U.S.-Mexican Studies at the University of California, San Diego.     

The Information Have-Less: Inequality, Mobility, and Translocal Networks in Chinese Cities

The “information have-less” is a social, economic, and political category for millions of rural-to-urban migrants and laid-off workers, who populate the vast gray zone of China's digital divide. Disengaged from institutions of agricultural and industrial production, the information have-less make use of such inexpensive ICT services as Internet cafés, prepaid phone cards, and Little Smart mobile phones. These low-end digital technologies are critical to enhancing labor mobility (both physical and social) and to the formation of “translocal networks”. In this paper, we conduct a preliminary assessment of ICT usage in, key city-regions in China and consider the consequences of translocal network formations for evolving information inequality in China. These networks raise key theoretical issues related to regionalism, mobility, and state-firm relationships that impinge on low-end service provision, and stratified patterns of information access and utilization within the have-less populations. We view translocal networks an important socio-economic asset of the information have-less and an arena for the articulation of labor mobility in China’s industrialization process and latest wave of urbanization. Carolyn Cartier is associate professor of geography at the University of Southern California. She is the author ofGlobalizing South China (Blackwell, 2001) and the co-editor with Laurence J.C. Ma ofThe Chinese Diaspora: Place Space, Mobility and Identity (Routledge, 2003). Manuel Castells is Wallis Annenberg Chair in Communication Technology and Society at the University of Southern California, Research Professor at the Open University of Catalonia in Barcelona, and Professor Emeritus of Sociology and of City and Regional Planning at the University of California, Berkeley. His current, research focuses on the social and economic implications of the Internet and the debate on new development strategies for the Information Age. Jack Linchuan Qiu is assistant professor at the School of Journalism and Communication, Chinese University of Hong Kong. He co-founded and moderates the Chinese Internet Research Group, a network of researchers from the academic, policymaking, journalistic, and activist communities.     

Collective capabilities, culture, and Amartya Sen’sDevelopment as Freedom

Conclusion Sen showed his usual wisdom and astute judgement in keeping his argument carefully focused and, therefore, elegant and compelling. Nonetheless, the understanding and pursuit of “development as freedom” must go beyond the arguments he lays out. As the global political economy moves with ever greater determination toward the implantation of more thoroughly marketized economic relations, analysts must correspondingly focus more closely on how to prevent market-based power inequalities from undermining “development as freedom.” Centralization of power over the cultural flows that shape preferences is a more subtle form of “unfreedom” than those which Sen highlights, but no less powerful for being subtle. Institutional strategies for facilitating collective capabilities are as important to the expansion of freedom as sustaining formal electoral institutions. Indeed, without possibilities for collective mobilization formal elections too easily become a hollow farce. Sen’s capability approach provides an invaluable analytical and philosophical foundation for those interested in pursuing development as freedom, but it is a foundation that must be built on, not just admired. Peter Evans is professor in the Sociology Department at the University of California, Berkeley. His current research interests focus on globalization and global governance institutions, and their effects on ordinary citizens. He has written numerous articles and books on subjects ranging from globalization, the role of the state in industrial development, and urban environmental issues. A current project supported by the Russell Sage Foundation examines possibilities for constructing North-South links between labor movements as a strategy for increasing the bargaining power of labor movements in the global South.     

Chile’s new entrepreneurs and the “economic miracle”: The invisible hand or a hand from the state?

The Chilean economy has grown by leaps and bounds over the last decade, thanks to a dramatic increase in export activities (and earnings), and the emergence of a more entrepreneurial capitalist class. This article attempts to explain that remarkable phenomenon using original data on entrepreneurs in one of Chile’s most important new export industries, namely, fishing. The central argument of the article is that domestic entre-preneurship flourished during the Pinochet period not because the state “got the economic environment right,” as the neoliberal ideologues are wont to argue, but rather because the Pinochet government behaved, in several important senses, like a “developmental state,”a la the states of East Asia. The analysis also reveals a heretofore ignored role of a developmental state, which is to help produce a new capitalist class culture. In the Chilean case, it was state policy as well as ideology that gave rise to a new generation of entrepreneurs. Rachel A. Schurman is assistant professor in the Energy and Resources Group and the Department of Sociology at the University of California at Berkeley. Her primary interests are in environmental sociology, and the role that natural resource industries play in regional economic development. She is currently working on the changing character of the tuna industry in the Western Pacific afters the Third U.N. Convention on the Law of the Sea. Her next project will be a book on the economic and ecological sustainability of natural resource-based, export-led growth in Chile.     

Industrial convergence,globalization, and the persistence of the North-South divide

This article demonstrates empirically that widespread convergence in the degree of industrialization between former First and Third World countries over the past four decades hasnot been associated with convergence in the levels of income enjoyed on average by the residents of these two groups of countries. Our findings contradict the widely made claim that the significance of the North-South divide is diminishing. This contention is based on a false identification of “industrialization” with “development” and “industrialized” with “wealthy”. Elaborating from elements of Joseph Schumpeter’s theory of innovation, Raymond Vernon’s product cycle model, and Pierre Bourdieu’s concept ofillusio, the article offers an explanation for the persistence of the North-South income divide, despite rapid Third World industrialization and despite dramatic changes in the world political-ideological context for development (that is, the shift around 1980 from the “development” project to the “globalization” project or “Washington Consensus”). While emphasizing the long-term stability of the Northern-dominated hierarchy of wealth, the article concludes by pointing to several contemporary processes that may destabilize not only the “globalization project”, but also the global hierarchy of wealth that has characterized historical capitalism. Giovanni Arrighi is professor of sociology at The Johns Hopkins University. His latest books areThe Long Twentieth Century: Money, Power and the Origins of Our Times (1994) and (with Beverly J. Silver et al.)Chaos and Governance in the Modern World System (1999). Beverly J. Silver is professor of sociology at The Johns Hopkins University. She is the author ofForces of Labor: Workers’ Movements and Globalization Since 1870 (2003) and co-author (with Giovanni Arrighi et al.) ofChaos and Governance in the Modern World System (1999). Benjamin D. Brewer is a graduate student in the Department of Sociology at The Johns Hopkins University. His dissertation is a commodity chains analysis of the professional-sport economy. He has also published articles on sport and globalization. Previous versions of this paper were presented at the American Sociological Association Meeting, Anaheim, August 2001; Lingnan University, Hong Kong, May 2001; the Graduate School, Chinese Academy of Social Sciences, Beijing, May 2001; the Annual Convention of the International Studies Association, Chicago, February 2001; the Center for International Studies, University of Southern California, November 2000; the Annual Meeting of the American Political Science Association, Washington D.C., September 2000; the Universidad Nacional Pedro Henriquez Urena, Santo Domingo, Dominican Republic, March 2000; and at the Conference on Ethics and Globalization, Yale University, April 2000. We benefited greatly from the comments of Hayward Alker, Charles Beitz, Peter Evans, Walter Goldfrank, Michael Mann, David Smith, Ann Tickner, and two anonymous reviewers forSCID.     

Don’t buy from me Argentina: Politics, economics, and trade liberalization in Argentina, 1992–2001

Recently, while opening their markets to international trade through tariff reduction, developing nations have been quietly adopting nontariff measures that impose new barriers on imports. This study contributes to a literature that assesses reactions to recent widespread economic reform, particularly in the developing world. While analysts have identified many determinants of the reform process, we are only beginning to assess the factors that shape its twists, turns, and even reversals. In particular, we do not yet have a clear understanding of the determinants of governments’ treatment of different groups and actors in this process. This article examines these reactions to trade liberalization in Argentina, an important middle-income nation, by drawing upon the significant body of theoretical and empirical literature on trade policy in developed nations that demonstrates that both economic and political factors condition policy implementation. Utilizing a data set of nontariff trade disputes from 1992 to 2001, the analysis employs probit maximum likelihood techniques to assess the relationship between trade policy outputs and economic and political factors. The findings suggest that economic factors, including import flows, and political factors such as the breadth of representation appear to condition trade policy decisions in Argentina. The results also suggest that overall macroeconomic context affects policy outputs. Jeffrey Drope is an assistant professor in the Department of Political Science, University of Miami. His recent articles and current research examine the political economy of trade policy and, more generally, how interests and institutions interact to generate policy. I thank Wendy Hansen, Ken Roberts, and theSCID reviewers and editors for valuable comments, the Latin American Institute at the University of New Mexico for financial support, and Pablo Sanguinetti for helpful introductions in Argentina.     

Democratization in Namibia: Soft state,hard choice

Independent Namibia’s struggles to create a functioning democracy have made great strides, including a successful regional and local election process in 1992. Soft state problems such as external dependence, weak state capacity for development, and penetration of the state by particularistic class and ethnic interests threaten at independence. In Namibia’s case the economic dominance and potential for military intervention by South Africa restricted the options available to the new SWAPO government. The intimidation and sabotage in the UNSCR 435 election left the government fragmented and weakened its effectiveness in redressing past injustices. Despite adopting moderate economic and progressive social policies, the rewards from trade and investment have been minimal. The independence honeymoon and modest improvements have bought the government time, but a soft state situation limits success and has created openings for new class formations. William A. Lindeke is Associate Professor and Chair of Political Science at the University of Massachusetts, Lowell, 1 University Ave., Lowell, MA 01854. He is currently writing a book on Namibia’s independence period. His recent publications have appeared in the inaugural issue ofJournal of African Policy Studies, Africa Today andNew Solutions.     

“Institutions and Economic Performance: The Use and Abuse of Culture in New Institutional Economics”: A Response to Heydemann

Applications of institutional analysis to the explanation of economic performance come in many flavors. Some economists have made use of an economics-oriented flavor in treating culture as one component of that analysis. Steven Heydemann uses a more political flavor of institutional analysis to argue that two of these economists, Douglass North and Avner Greif, have overly simplified and homogenized the concept of culture and the way in which it affects economic performance. He goes on to identify several instances in both the economic history and contemporary experience of the Middle East where he claims that such over-simplification has led to shortcomings in the analysis. This paper suggests that while some of Heydemann’s claims have merit, several others are exaggerated.

The developmental state: Israel, South Korea, and Taiwan compared

The growth performances of the Israeli economy during the years 1948–1973 were excellent by any criteria, and are comparable to the “miraculous” performances of South Korea and Taiwan. Excellent economic performances in the three countries were accompanied by the presence of an autonomous and an interventionist state as well as by strategies of governed development (in the spheres of finance, investment, and international trade). The comparison is used, to shed new light on the Israeli political economy as well as on the replicability of the developmental state model across regions, cultures, and political regimes. First, by comparing the three countries and pointing to the similarities in the role and autonomy of the state, the article offers a different interpretation of the Israeli economy from that offered by both neoclassical and neomarxist interpretations of the Israeli political economy. Second, successful cases of develoment are rare in our world; this should make the study of the Israeli political economy a valuable case-study for the proponents of the developmental state model. By pointing out the similarities in the growth performances and the developmental strategies of Israel, Taiwan, and South Korea, as well as the dissimilarities in their political regimes, their cultural traditions, and their regional settings, this article further strengthens the arguments in favor of state-guided economic development in developing countries. David Levi-Faur is a lecturer of comparative public policy and business and politics at the University of Haifa. He was a visiting scholar at the L.S.E., University of California, Berkeley, the University of Utrecht, and the University of Amsterdam.     

Overcoming the past: De-communization and reconstruction of post-communist societies

In several of the central and eastern European nations, the fall of Communism has initiated a new round of political intolerance that threatens to destroy the foundations of their fragile democratic regimes. Campaigns of lustration (political “cleansing”) have imposed ideological tests for employment and political participation in the Balkan countries and in parts of the former Soviet Union. The small, poor nation of Albania has been especially seriously impacted by this atmosphere of vengeacean against ex-Communists and their families. Justified by the principles of destructive entitlement—reminiscent of ancient cultural rituals of blood retribution—journalists have been arrested, members of the opposition have been imprisoned, and University programs have been suspended. In response to Albania’s plight, and to a similar pattern of civil rights abuses in neighboring countries, social scientists have begun to analyze the powerful role played by the “past-in-the-present” in current reconstruction efforts. As Jurgen Habermas, Adam Michnik, Seymour Martins Lipset, and others have noted, a new “culture of forgiveness” may well be a necessary condition for the development of stable and authentic democratic societies in the region. Fatos Tarifa is currently at the Department of Sociology, University of North Carolina at Chapel Hill. He received his Ph.D. in Political Science from the University of Tirana in 1985. He is director of the New Sociological Research Center (NSRC) in Tirana, Albania, and is the author of several books and journal articles, including a 1991 bookIn Search of the Sociological Fact (published in Albanian). Jay Weinstein is a professor of sociology at Eastern Michigan University. He has travelled widely in the Third World and in Central and Eastern Europe. Author of numerous books, journal articles, and chapters, he is currently working on a volume entitledSocial and Cultural Change: Social Science for a Dynamic World (forthcoming in 1997 by Allyn & Bacon Publishers).     

Understanding contentious collective action by Chinese laid-off workers: The importance of regional political economy

Episodes of contentious collective action involving laid-off workers have erupted throughout China in recent years. With few exceptions, studies of Chinese laid-off workers’ contention have attempted to generalize from field research in very few⦓r even single⤜ocalities. This limitation has led to several debates that can frequently be addressed by examining differences in political economy among China’s industrial regions. Based on 19 months of fieldwork and over 100 in-depth interviews with workers, managers, and officials in nine Chinese cities, this article offers a systematic, sub-national comparative analysis of laid-off workers’ contention. The article also addresses broader issues in the analysis of social movements and contentious politics, a field that has too often failed to take such regional differences into account. William Hurst is a Ph.D. candidate in political science at the University of California, Berkeley, where he is completing a dissertation on the politics of China’s state-sector lay-offs. His previous publications include “Analysis in Limbo: Contemporary Chinese Politics Amid the Maturation of Reform” (with Lowell Dittmer;Issues & Studies, December 2002/March 2003), and China’s Contentious Pensioners” (with Kevin O’Brien;The China Quarterly, June 2002). This article benefited from the assistance of many Chinese friends and colleagues in Beijing, Benxi, Chongqing, Datong, Harbin, Luoyang, Shanghai, Shenyang, and Zhengzhou. Kiren Chaudhry, Calvin Chen, Ruth B. Collier, Kenneth Foster, Mark W. Frazier, Douglas Fuller, Mary E. Gallagher, thomas B. Gold, Kun-chin Lin, Chung-in Moon, Kevin O’Brien, Dorothy Solinger, Jaeyoun Won, as well as Judy Gruber and all the participants in her Spring 2003 seminar, and two anonymous reviewers offered extremely helpful comments. For their generous financial support during various stages of my research and writing, I wish to thank: the Fulbright Institute of International Education Program, the National Security Education Program, the Yanjing Institute at Harvard University, the University of Hawaii, Beijing University, the Lewis Mumford Center for Comparative Urban and Regional Research at SUNY-Albany, the University, of California Institute for Labor and Employment, as well as the Graduate Division, the Institute for International Studies, the Institute for East Asian Studies, and the Center for Chinese Studies at the University of California-Berkeley.     

Institutions and Development in Latin America: A Comparative Analysis

We review the theoretical literature on the concept of institutions and its relationship to national development, propose a definition of the concept, and advance six hypotheses about institutional adequacy and contributions to national development. We then present results of a comparative empirical study of existing institutions in three Latin American countries and examine their organizational similarities and differences. Employing the qualitative comparative method (QCA) proposed by Ragin, we then test the six hypotheses. Results converge in showing the importance of meritocracy, immunity to corruption, absence of “islands of power,” and proactivity in producing effective institutions. Findings strongly support Peter Evans’ theory of developmental apparatuses.

Causes of brain drain and solutions: The Taiwan experience

Over the years, Taiwan has experienced “brain drain”, as more than 80 percent of its students who completed their graduate study in the United States have failed to return. Instead, they have found their ways into the faculties of American colleges and universities or employment opportunities in various research organizations and industries. This article examines brain drain, its origin in Taiwan, and government response. One of the major findings of this study is that the elite emigration in Taiwan has been caused by a host of complex academic, social, economic, and personal factors. Second, Taiwan’s brain drain into the United States is primarily a case of “education and migration.” It is an outflow of college graduates, not an exodus of trained scientists and engineers; therefore, Taiwan’s manpower loss in the short run is not as serious as the case where mature and experienced scientists and professionals leave. Furthermore, whereas a large number of college graduates leave each year to study abroad, a much larger number of the graduating class does remain in Taiwan. To reverse Taiwan’s brain drain, the government of the Republic of China (ROC) has already implemented an ambitious program to recruit Taiwan’s highly trained talents from overseas. Taiwan’s successful experience could be emulated by other developing countries. Shirley L. Chang received her B.A. in Foreign Languages and Literature from National Taiwan University, Master of Library Science from Columbia University, and M.A. in Higher Education from The Pennsylvania State University. She is Chairman of the Department of Library Services and Catalog/Reference Librarian at Stevenson Library, Lock Haven University, Lock Haven, PA 17745.     

Sociological explanations of economic growth

Even if questions of how resources aredistributed within and between societies are our main concern, we must continue to grapple with the issue of the causes of economic growth because economic growth and level of development continue to be among the most important causes of inequality, poverty, unemployment, and the quality of life. This paper’s dependent variable is the economic growth rate of 55 less developed countries (LDCs) during two time periods—1970–78 and 1965–84. The causal model consists of control variables—level of development and domestic investment in 1965—and a variety of independent variables drawn from major sociological theories of economic growth published during the last three decades. Multiple regression analysis shows that, net of the effects of the two control variables, the variables that have the strongest effect on economic growth rates are: (1) direct foreign investment, which has a negative effect; (2) the proportion of the population in military service; and (3) the primary school enrollment ratio, both of which have positive effects of economic, growth. On the other hand, variables drawn from some theories receive no empirical suport. The mass media of communications, ethno-linguistic heterogeneity, democracy and human rights, income inequality, and state-centric theory’s key variable—state strength—all fail to show any significant impact on economic growth rates when the control variables and the significant independent variables are held constant. The theoretical implications of these findings are discussed.     

Foreign capital in Korea’s economic development, 1960–1985

The relationship between foreign capital and state autonomy is investigated in the rapidly developing South Korean economy. The changing composition and the sectoral distribution of the different types of foreign capital, the role of the Korean state in the acquisition and distribution of foreign capital, and the implications of foreign capital on the autonomy and capacity of the state are studied. The findings show that public loans and state-guaranteed commercial loans in the 1960s and 1970s have supported and strengthened state autonomy, while direct foreign investment (DFI) and commercial loans in the 1980s could potentially undermine it. Significant changes in the 1980s—rapid increase of Japanese DFI in hotels, commerical loans behaving more like DFI, and changing industrial orientation of the Korean economy toward more high-technology sectors—suggest that the types of foreign capital which are more independent of state control and more keen on market signals will increase in the future. This has importnat implications for future Korean economic development. Eun Mee Kim is an assistant professor of sociology at the University of Southern California. Kim has been conducting research on various topics of economic development and political development in South Korea and East Asia, and has published inPacific Focus, andThe Journal of Developing Societies. Kim’s current research includes the industrial organization and growth of the “chaebol” (business conglomerates) in Korea; the political economy of MNC investment by U.S. and Japanese corporations; and economic liberalization and political democratization in Korea and Taiwan.