Industrialization and Developing Countries' Indebtedness: A Theoretical and Empirical analysis

The following paper is a theoretical and empirical study of the determinants of international indebtedness of developing countries. I will argue that indebtedness is a divelopment determined phenomenon and an intrinsic tendency of capitalist development during the stage of the internationalization of productive capital. Different levels of indebtedness by developing countries can be explained by their stage of development and their position in the international division of labor. Developing country indebtedness universally increases during the phase of import substutution industrialization (corresponding to the early phase in the internationalization of production). Indebtedness continues to grow in countries exteriencing export-led industrialization, while the rate of grewth declines in countries at a higher stage of this phase.