Comment on Bornschier

Abstract

In the September 1981 issue of the Journal of Conflict Resolution, Volker Bornschier published another in a series of articles on the effects of the stock and flow of foreign capital in the less developed countries on their rate of economic growth.' Here, as elsewhere, Bornschier maintains that what others have found to be an apparent postitive relation between stock of foreign investment (PEN) and growth rates is actually spurious. In fact, he g~oes so far as to deny even a zero order correlation between stock of investment and economic growth. Bornschier claims that his methods of coming to his conclusions are sophisticated (deceptive) methods. The facile use of control variwith him are simplistic. However, in reality, Bornschier demonstrates nothing more than how easy it is to produce just about any conceivable results with multivariate computer analysis-if one is willing to throw in enough control variables and to utilize enough different sets of countries. But, in fact, there is no getting around the absolute necessity for careful theoretical justification of the models employed, as well as for an examination of the concrete countries affected. The question, then, in this as well as in most other cases of disagreement about important research questions (such as the effect of foreign capital on growth), is primarily theoretical-and not who is using the more sophisticated (deceptive) methods. The facile use of control variables and arbitrary sets of countries cannot be substituted for analysis. Contrary to Bornschier, among the less developed countries that are integrated into the world market, those with the highest levels of foreign investment generally have higher rates of overall economic growth than