(i) W.W. Rostow, an American economist believed that former colonies could follow the paths taken by early industrial states like Britain and by expanding their agricultural production and following free-trade policies, could accumulate the capital to develop industry, and thus move into economic modernity. This concept of development is known as 'modernisation theory'.
(ii) While countries like Argentina and later Brazil tried to follow this model and did develop some industry, many other Latin American, African and Asian countries showed signs of 'development crisis' between the 1960s and 1980s: stalled industrialisation, and increasing poverty.
(iii) Foreign companies in Latin America after 1960 took out far more money (as profits) than they had invested there. Loans from private banks and bodies like the I.M.F. did not improve the situation: during the 1980s, Latin American states had to make loan repayments totaling more than $200 billion (U.S.A. dollars).
(iv) In the early 1990s, more than sixty percent of Latin American households did not earn enough to cover basic needs such as food, clothing and shelter.
(v) In Africa, the economic situation was still worse: some African states like Zaire and Burundi experienced negative growth during the 1980s.
(vi) Economists and political scientists in Latin America crticised the arguments made by economists like Rostow and the development policies promoted by some Western leaders. This critique is sometimes called 'dependency theory' or 'underdevelopment theory'.
(vii) Raul Prebisch and other 'dependency. theorists' claimed that centuries of Spanish and Portuguese rule, followed by decades of economic domination by Britain, the U.S.A. and other states, had left most Latin Americans unable to exercise their freedom, especially with regard to material circumstances like employment and use of economic resources.
(viii) Walter Rodney in Africa in the 1970s observed that colonies could not easily pull out of the 'dependency patterns' created during the centuries of colonialism. They claimed that agriculture would remain backward until large landowners ceased exploiting the poorer peasants and labourers: large estates (like the zamindari in India) should be broken up and land redistributed to peasantry.
(ix) Many successful political leaders in the "Third World', based on experience of Soviet Union and China, have followed economic development strategies based on state ownership or control of enterprises and resources.
(x) They have also tried to prevent mass outflows of profits to foreign investors and states, and to lift up the poor through free education, more affordable health care, and so forth. For example, in Cuba Fidel Castro (b. 1927) led a nationalist revolution during the late 1950s, and has been following such policies that favour the interests of the Cuban people.
(xi) The Castro revolution has been popular among some Latin Americans who resent continuing foreign influence and dictatorships of their countries propped up by the U.S.A. The majority of the Cubans enjoy a better standard of living than people in richer countries.
(xii) Other Latin American leaders after 1960 followed the Cuban example in some respects. Salvador Allende tried to 'nationalise' the Chilean mineral resources controlled by foreign corporations. However, he was deposed and killed in 1973 by internal enemies with assistance from the U.S.A. and replaced by a dictator (General Pinochet) until 1990.
(xiii) Hugo Chavez (b. 1954–), an army officer elected President of Venezuela in 1998, has used revenues from state-owned oil companies to lift Venezuelans out of poverty. Government spending on social programs was increased dramatically during the first years of his presidency, and he has been able to resist the US quite effectively.
(xiv) The rule of Castro in Cuba and the rise of Chavez in Venezuela show the strength in the parts of the developing world of nationalist and pro-people patterns of development.
