Effects of Foreign Investment, Exports, and Economic Growth on Third World Food Consumption

Abstract

World-system and related theories indicate that international dependence has important impacts on the satisfaction of basic needs such as nutrition. However, previous crossnational studies of food consumption have yielded ambiguous findings on the effect of export dependence on consumption; they also have neglected the potentially intervening role of economic growth — the focus of earlier cross-national research and an object of ongoing controversy. Our panel analysis of 59 Third World countries for 1967–1985 shows that reduction of primary export dependence promotes food consumption, and that transnational corporate (TNC) investment dependence has an exceptionally strong harmful effect on consumption. Economic growth, however, mediates very little of the effects of dependence on consumption, signifying the limited relevance of earlier crossnational research on growth. Our findings, which support world-system, dependency, and related perspectives, are upheld by robust regression analysis.