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International investment and colonial control: a new interpretation


  • Frieden, Jeffry A.


The impact of economic factors on colonial imperialism in the late nineteenth century has long been a topic of debate. This article examines the expected relationship between different forms of international investment and different patterns of political ties between developed and developing countries. Drawing on the literature on relational contracts and collective action, it argues that direct colonial control was likely to be associated with cross-border investments whose rents were particularly easy to seize or protect, and whose protection did not require multilateral action. Where such rents were difficult to seize or protect unilaterally, colonialism is expected to be less likely. The most common example of the former sort of investment is primary (raw-materials or agricultural) investment; of the latter, multinational manufacturing affiliates. The argument is weighed against both a survey of the qualitative evidence and some simple quantitative evaluations. The approach also has potential applications to more general problems of international conflict and cooperation.

Suggested Citation

  • Frieden, Jeffry A., 1994. "International investment and colonial control: a new interpretation," International Organization, Cambridge University Press, vol. 48(04), pages 559-593, September.
  • Handle: RePEc:cup:intorg:v:48:y:1994:i:04:p:559-593_02

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    1. repec:eee:wdevel:v:106:y:2018:i:c:p:187-206 is not listed on IDEAS
    2. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    3. repec:bla:ecopol:v:29:y:2017:i:2:p:91-117 is not listed on IDEAS

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