Dependency theory or dependencia theory
is a body of social science theories
predicated on the notion that resources flow
from a "periphery" of poor and
underdeveloped states to a "core" of
wealthy states, enriching the latter at the
expense of the former. It is a central
contention of dependency theory that poor
states are impoverished and rich ones
enriched by the way poor states are
integrated into the "world system."
Dependency Theory developed
in the late 1950s under the
guidance of the Director of the
United
Nations
Economic
Commission for Latin America,
Raul Prebisch.
The theory arose around 1970 as a
reaction to modernisation theory,
an
earlier
theory
of
development which held that all
societies progress through similar
stages of development, that today's
underdeveloped areas are thus in a
similar situation to that of today's
developed areas at some time in
the past, and that therefore the
task in helping the underdeveloped
areas out of poverty is to accelerate
them along this supposed common
path of development, by various
means such as investment,
technology transfers, and closer
integration into the world market. Dependency theory
rejected this view, arguing that underdeveloped
countries are not merely primitive versions of
developed countries, but have unique features
and structures of their own; and, importantly, are in
the situation of being the weaker members in a world
market economy, whereas the developed nations
were never in an analogous position; they never had
to exist in relation to a bloc of more powerful and
economically advanced countries than themselves.
Dependency theorists argued, in opposition to free
market economists and modernization theorists, that
underdeveloped countries needed to reduce their
connectedness with the world market so that they can
pursue a path more in keeping with their own needs,
less dictated by external pressures
Dependency Theory
Responded to failures of modernization
Response to the spread of global capitalism
Originated in Latin America (ECLA)
Viewed Development from a ‘Third World’
perspective
Dependency Theory
Birth Factors
• Import Substitution Industrialization was failure. Social problems
increased, poverty, unemployment, urbanization
• Industrialization by Invitation in the Caribbean failed to deliver, social
problems increased
Dependency Theory Birth Factors
Cuba and Chinese Revolution offered the hope of
skipping capitalism and entering socialism
Rise of radicals such as feminists and anti-war
activism
Modernization school popularity declined in the US
Dependency Theory
• Dependency maintained as lifestyle and wealth in dependent world
tied to the elite of the metropolitan
• Extraction of resources in dependent societies exported to
metropolitan
Fernando Cardoso Dependent Development
• Foreign Investment moving from traditional to industrial sectors
• Foreign ownership of the MOP in the dependent countries: joint
venture etc.
Dependency Theory
• MNCs have favourable conditions to operate in dependent countries,
tax holidays, laws etc.
• The lack of technology deepens the level of dependency
• Dependent economy linked to the international capitalist system
• Advanced and backward structures in the dependent economy
develop
Dependency Theory
• Dependent Development results in new social and
political arrangements:
1.Local elites linked to foreign counterparts
2.Parts of the middle class (intellectuals,state)
become involved in the new arrangement
3.Working class becomes part of the
‘internationalized’ sector of the capitalist system.
André Gunder Frank
“The
Development of Underdevelopment” Monthly Review,
(1966).
• “most of our theory fails to explain the structure and
development of the capitalist system as a whole and to
account for its simultaneous generation of
underdevelopment in some of its parts and economic
development in others”
André Gunder Frank (1966)
• “underdevelopment is not original or traditional…neither the past nor
the present of the underdeveloped countries resembles in any important
respect the past of the now developed countries. The now developed
countries were never underdeveloped, though they may have been
undeveloped.”
• “contemporary underdevelopment is on large part the historical of past
and continuing economic and other relations between the satellite
underdeveloped and the now developed metropolitan countries”
André Gunder Frank (1966)
• “present underdevelopment of Latin America is the result of its
centuries-long participation in the process of world capitalist
development”
• “underdevelopment was and still is generated by the very same
historical process which also generated economic development: the
development of capitalism itself”
WORLD SYSTEMS THEORY
(1970’s – 1980’s)
•
Capitalist World Economy = A single world system
committed to production for sale or exchange, with
the object of maximizing profits rather than
supplying domestic needs (i.e. sugar and cotton
plantation economies) since 15th and 16th centuries
•
Unit is no longer the “nation-state” but a social
system based on political and economic relations—
“class”
WORLD SYSTEMS THEORY (cont.)
•
•
More similarity in class experience across national
borders, and often more divisions between the rich
and poor within them
CORE—dominant position in world system,
strongest/powerful nations
--Produce “advanced” goods using high
technology and mechanization
--Exports some of these goods to semiperiphery and periphery
--“free workers”
WORLD SYSTEMS THEORY (cont.)
• SEMI-PERIPHERY & PERIPHERY = “2nd & 3rd
World” nations with less power, wealth, and influence;
coerced workers
• SEMI = export industrial goods but lack power of core;
i.e. Brazil—exports cars to NI and engines, orange juice
extract, coffee to US
• PERIPHERY = intensive human labor, less
mechanization; produces raw materials, agricultural
commodities, and labor for export to semi and core
WORLD SYSTEMS THEORY (cont.)
•
Relationship between core and periphery is
fundamentally exploitative
•
Unequal exchange between manufactured goods for
raw materials
•
economic relations between core and periphery tend
to benefit capitalists in the core at the expense of the
periphery
What are some of the ways
Caribbean societies are
dependent upon the metropole
and why?
Plantation System- Lloyd Best and George
Beckford
• Plantation system shaped the structure of society during colonialism
• Post colonial period the institutions and rules of the game continued
to be shaped from outside
• Continue to be dependent upon the north- economically, politically
and culturally.
• Continue to be price takers and consumptionists
Dependency Theory Critique
• Dependency does not automatically lead to underdevelopment e.g.
since WWII South Korea and Taiwan previously colonies of Japanhave experienced rapid economic growth
• Failed to explain the national development goals of the periphery,
post Independence
• Political blame
• Too external of an analysis
• Propaganda & Rhetoric
• Inability to evolve with the shortcomings and criticism
Questions &
Comments