¹ See Prebisch, Raúl, The Economic Development of Latin America and Its Principal Problems (New York: UNECLA, 1950)Google Scholar; ECLA, Estudio Económico de América Latina (Santiago, Chile: ECLA, several issues)Google Scholar; ECLA, International Cooperation in a Latin American Development Policy (1954)Google Scholar; Gregg, Robert, “The U.N. Regional Economic Commissions and Integration in the Underdeveloped Regions,” in Nye, Joseph, ed., International Regionalism (Boston: Little, Brown, 1968)Google Scholar; Urquidi, Victor L., Trayectoria del Mercado Común Latinoamericano (Mexico City: Centro de Estudios Monetarios Latinoamericanos, 1960)Google Scholar.

² The history of the Central American Common Market and the role of ECLA and the United States in its formation are examined in the excellent collection edited by Menjívar, Rafael, La Inversión Extranjera en Centroamérica (Costa Rica: EDUCA, 1975)Google Scholar. In particular see the articles by Susanne J. Bodenheimer, David Tobis, and Edelberto Torres-Rivas.

³ See Susanne J. Bodenheimer, “El Mercomún y la Ayuda Norteamericana,” in Menjívar, La Inversión, for a detailed discussion of the role of the United States in the abandonment of the plan for integration industries.

⁴ Tobis, David, “The CACM: The Integration of Underdevelopment,” NACLA 3, 9 (01 1970), pp. 1–8CrossRefGoogle Scholar.

⁵ In the development literature this approach is represented by the diffusion theme, which argues that development occurs through diffusion of material and cultural factors from developed to underdeveloped societies and from modern to traditional sectors. This view is best expressed in W. W. Rostow's stage theory of development. See Rostow, W. W., “The Take-off into Self-Sustained Growth,” in Argawala, A. N. and Singh, S. P., eds., The Economics of Underdevelopment (New York: Oxford University Press, 1956)Google Scholar. For a good discussion of the “developmentalist” paradigm, see Bodenheimer, Susanne J., The Ideology of Developmentalism: The American Paradigm-Surrogate for Latin American Studies (Beverly Hills, Calif.: Sage, 1971)Google Scholar.

⁶ Tobis, “The CACM.”

⁷ See ibid.; Bodenheimer, “El Mercomún”; Torres-Rivas, Edelberto, “The Central American Model of Growth: Crisis for Whom?” Latin American Perspectives 7, 2–3 (Spring–Summer 1980), pp. 24–44CrossRefGoogle Scholar; and Schmitter, Philippe C., Autonomy or Dependence as Regional Integration Outcomes: Central America (Berkeley: University of California, 1972)Google Scholar.

⁸ See Cardoso, F. H. and Faletto, E., Dependency and Development in Latin America (Berkeley: University of California Press, 1979)Google Scholar. For a more comprehensive discussion of the role of MNCs in Latin America, see Santos, Theotonio Dos, Imperialismo y Empresas Multinacionales (Buenos Aires: Periferia, 1973)Google Scholar; Muller, Ronald, “The Multinational Corporation and the Underdevelopment of the Third World,” in Wilber, Charles, ed., The Political Economy of Development and Underdevelopment (New York: Random House, 1973)Google Scholar.

⁹ See Quijano, Aníbal and Weffort, Francisco, Populismo, Marginalización y Dependencia (Costa Rica: EDUCA, 1973)Google Scholar.

¹⁰ See UNCTAD, Major Problems Arising from the Transfer of Technology to Developing Countries (New York: UNCTAD, 1972)Google Scholar.

¹¹ An attempt was also made to obtain information from public institutions such as the Central Bank, the Ministry of Economics, and the Planning Office, but most of these data were extremely sketchy and aggregated. The analysis, therefore, is based mainly on the interview data.

¹² Bello, Juan Carlos Del, “Dependencia tecnológica en una economía centroamericana: Convenios de licencia y patentes de invenci6n en Costa Rica” (Instituto Tecnológico de Costa Rica, 10 1979)Google Scholar.

¹³ Transfer pricing involves the marking up of prices of intermediate inputs. It is an aspect of transfer accounting, “the allocation of accounting items in a firm's profit and loss account so as to minimize the tax payments which the firm is obliged to make.” The values assigned to different items bear little relation to market values. See UNCTAD, Major Problems, p. 20Google Scholar.

¹⁴ In the period 1958–1967, according to Colman and Nixson, almost 50% of all manufacturing operations established in Latin America were takeovers of existing industry. See Colman, David and Nixson, Frederick, Economics of Change in Less Developed Countries (New York: Wiley, 1978)Google Scholar. This denationalization of industry takes place even in the largest and most industrialized Latin American countries, where the industrial and entrepreneurial sectors are strong. According to Newfarmer, takeovers have been increasing in Brazil, with 66% of U.S. multinationals established between 1973 and 1975 being takeovers of existing firms. See Newfarmer, Richard S., “TNC Takeovers in Brazil: The Uneven Distribution of Benefits in the Market of Firms,” World Development 7, 1 (01 1979), pp. 25–43CrossRefGoogle Scholar.

¹⁵ The most common elements of the technological package are technical assistance, trademarks and brand names, patents, formulas and blueprints, assistance in the design and construction of the plant, assistance in the design of the product, quality control, assistance in the purchase of equipment and inputs, advertising, administration, training of personnel, and marketing.

¹⁶ The terms involved in package transfers serve to yield high rates of return and to protect the competitive position of the supplier. High rates of return are obtained in the form of profits from the sale of intermediate goods, equipment and spare parts, technical services, and transfer pricing practices. See Vaitsos, Constantine, “Power, Knowledge and Development Policy: Relations between Transnational Enterprises and Developing Countries,” in Helleiner, G. K., ed., A World Divided (Cambridge: Cambridge University Press, 1976)Google Scholar.

¹⁷ See UNCTAD, Major Problems; Vaitsos, “Power, Knowledge”; UNIDO, National Approaches to the Acquisition of Technology (New York: UNIDO, 1978)Google Scholar; UNCTAD, Handbook on the Acquisition of Technology by Developing Countries (New York: UNCTAD, 1978)Google Scholar.

¹⁸ See Vernon, Raymond, “The Multinational Enterprise: Power versus Sovereignty,” Foreign Affairs 49, 4 (07 1971), pp. 736–51CrossRefGoogle Scholar; Moran, Theodore H., “Multinational Corporations and Dependency: A Dialogue for Dependentistas and Non-dependentistas,” International Organization 32, 1 (Winter 1978), pp. 79–100CrossRefGoogle Scholar.

¹⁹ See Sunkel, Osvaldo, “Big Business and Dependencia,” Foreign Affairs 50, 3 (04 1972), pp. 517–31CrossRefGoogle Scholar.

²⁰ See Vaitsos, Constantine, Intercountry Income Distribution and Transnational Enterprises (London: Oxford University Press, 1974)Google Scholar, for a detailed discussion of the product-cycle theory as a theory of monopoly cycles.

²¹ Evidence from the study conducted by Vaitsos (Intercountry Income Distribution) in the Andean Pact indicates that overpricing is indeed considerable, with the highest figures (up to 200% overpricing) reported for foreign-owned Pharmaceuticals. Managers of pharmaceutical companies interviewed in Costa Rica admitted their inputs are marked higher in their interaffiliate sales, citing the high cost of research and development of new products as the reason for this practice.