ABSTRACTDuring the last decade a series of essays by prominent development theorists were published in which it was argued that development theory was in crisis. In my view the First World bias of development theory has contributed to its shortcomings. This bias is evidenced by the failure of development theory seriously to examine and incorporate into its mainstream the theories emanating from the Third World. In this paper I deal with the Latin American contribution to development theory. While development theorists have given some attention to dependency studies and structuralism, far too little appreciation has been given to the writings on marginality and internal colonialism. However, the significance of the structuralist school for development thinking and practice has yet to be fully acknowledged. Furthermore, dependency theory has been much distorted and key dependency writers have been completely ignored, especially in the Anglo‐Saxon world. The following themes of the multi‐stranded Latin American development school are examined: the debate on reform or revolution, the structuralist or centre‐periphery paradigm, the analyses on internal colonialism and marginality, and the dependency studies. Wherever relevant the key differing positions within the Latin American school are presented. I then proceed to examine the shortcomings as well as the contemporary relevance of these Latin American theories of development and underdevelo