Foreign Capital Penetration, State Intervention, and Development in Sub-Saharan Africa

Despite the growing debt crisis in sub-Saharan Africa, previous quantitative research on Africa has failed to investigate the association between foreign debt and development. This failure represents a glaring omission in development research because foreign debt and other types of foreign capital penetration may have an impact on various programs that facilitate economic growth and physical quality of life. This paper argues that Africa is influenced by a complex interaction among foreign capital penetration, state processes, and different types of development. The data analysis demonstrates that foreign capital affects African states, which, in turn, influence economic expansion and improvement in physical quality of life. Although substantively interesting, these findings also have broad theoretical implications for scholars conducting research on Africa and other Third World regions. Perhaps most important, the results indicate that contemporary Africa cannot be explained within the context of a single theoretical perspective. Instead, scholars must integrate and modify current theories of international political economy to reflect the uniqueness of modern Africa.