SINGER, SERVICES AND SOFTWARE

It is more than 40 years ago that Hans Singer published his celebrated paper on the ''Distribution of Gains between the Investing and Borrow ing Countries''. This article reexamines his hypothesis that the gains from foreign investment tend to be distributed heavily in favor of th e investing countries in the context of India's fast-growing computer software sector. It identifies the proximate reasons for the birth and growth of a human capital-intensive service sector in a poor country and raises issues concerning its costs and benefits to the economy. It suggests that investments in services, such as software, too can resu lt in export enclaves with very little forward and backward linkages w ith the rest of the economy in which they are located. (C) 1997 Elsevi er Science Ltd. All rights reserved.