Structural Determinants of Peripheral Urbanization: The Effects of International Dependence

This paper examines the extent and mechanisms by which international economic dependence affects urbanization in peripheral countries between 1950 and 1970. Using panel regression analyses qnd structural equation models on a sample of37 countries, investment dependence is found to have a lagged positive effect on urbanization in 1970. The data suggest that investment dependence stimulates growth in the tertiary and informal sectors, while inhibiting growth in the industrial labor sector. This restructuring of the urban labor force generates increased levels of overurbanization in peripheral countries. Finally it is argued that dependency theory provides a more adequate framework for understanding urbanization in peripheral countries than modernization theory.