Merhav, M. ‘Technological Dependence, Monopoly and Growth’, Pergamon Press

Merhav suggests that developing countries are not likely to repeat the same process of development that the developed countries have done, with regards to industrialisation and growth, and warns against ‘techological dependence’. He also argues that transnational corporate control of technology is a key factor in binding developing economies to an “open economy” policy in the international system.

“Dr. Merhav’s main thesis is that stagnationist tendencies […] are likely to occur earlier in the development of today’s underdeveloped economies and serve to stunt their growth.” (Kuznets, 1970: 68) Merhav focuses on the manufacturing sector and argues that the import of technology adapted to factor proportions and output scale of industrialized nations has fostered monopolistic market structures and associated restrictionist behaviour in emerging manufacturing industries in developing economies. Merhav describes this ‘technological dependence’ as economically irrational and harmfully self-perpetuating in the capitalist world economy.

Kuznets suggests that the principal contribution of this book is that Merhav examines conditions of entry and emergence of market structure using modern oligopoly theory but in the unexplored context of the developing economy, and the examination of the relationship between market structure and poor performance in developing economies. (Kuznets, 1970: 68)