ABSTRACT
This chapter explores the theoretical divisions between the liberal perspective and the neo-Marxist, dependency and world-systems perspectives on foreign capital and economic development. By and large, these two perspectives dominated the development debates of the past two decades, and strong echoes of these debates reverberate in the new debates between the optimists and pessimists on the future of globalization. This chapter explores the theoretical debates on both positions on the effects of foreign capital on economic growth, considering especially recent controversies that form the bases of the empirical analyses of the present study presented in Chapter 3. First, however, I trace the bases of the new arguments and link them to older theory.
