Dependency Theory

Is the dependency critique of world development relevant today?

What is Dependency
Generally dependency is the reliance on a person, or something for support, survival or enhancement In development studies dependency speaks to a situation in which a particular country or region relies on another for support, survival and growth.

What is the Dependency Critique?

A Neo-Marxist perspective that maintains that Third World countries are Underdeveloped because of the activities of the First World. Dependency theory holds that the condition of underdevelopment is precisely the result of the incorporation of the Third World economies into the capitalist world system which is dominated by the West and North America (Randall and Theobald 1998, 120) Dependency Theory emerged in the 1950s as a critique of Modernization Argues that these Classical theorists failed to recognized that Imperialism, Colonialism and Neo-Colonialism is solely responsible for the development of the First World and the subsequent underdevelopment of the Third World.

Background of Dependency Critique

United Nation Economic Commission for Latin America (ECLA). Proposal for a structural economy based on Import-Substitution Industrialization in Latin America. Generated critical response from Economist such as Raoul Prebisch and Celso Furtado. Paul Baran. The foundation of their ideas: ( internal conditions that affect growth) lack of economic growth because of lack of capital resources

Features of the Dependency Theorization

The existence of a Capitalist World System In this capitalist system countries are divided into Metropoles and Satellites (Frank) or Core and Semiperiphery and Periphery (Wallerstein) Core Countries/ are the Rich Industrialized Countries of the West, whose GDP and per capita income exceed 7% per annum Peripheries are those countries whose annual rate of growth is less than 5-7% and are primary producers of goods and services Semi-peripheries: Newly industrialized countries, China, Singapore, Taiwan, South Korea (Asian Tigers), Cuba, Brazil, Venezuela, Mexico, Indonesia, Egypt, Portugal, Spain and Italy.

Features contd
The capitist system operates where peripheries/Satellites provide raw material for the Core/Metrpole countries who manufacture and sells it. Thus the basis of dependency and Underdevelopment

How Dependency Occurs

Emergence of Europes drive to capital accumulation, 1500 Led to the colonization of Latin American, Caribbean, African and East Asian States. The Extraction of Wealth (Natural Resources and Capital) from the colonies resulting in stagnation Subsequent transfer wealth to the Europe facilitating industrialization and development (Walter Rodney: How Europe Underdeveloped Africa) The persistent of culture of dependency even after colonialism. Third World-Producers/ First World Manufacturers

Andre Gunder Frank

Ideas: Monopoly control of trade. Unequal exchange between Metropole and Satellite resulted in the extraction of Surplus Value (Potter and Binns et al, 1999). Development and Underdevelopment are opposite sides of the coin: the development of the industrialized world was and is made possible only by the corresponding underdevelopment of the Third World (Randall and Theobald, 1985, p. 107)

Immanuel Wallerstien
Ideas: The existence of a total system or network driven by the endless accumulation of profits the perpetual and widening inequity among states is explained by capitalism and the international division of labour and the production (Kegley 2006, 141) The International division of labour leads to the development of countries as core, periphery and semi-periphery

Assumption of Dependency
In general, the theory of dependency holds that both political and economic dependency are inversely and significantly related to economic prosperity, that is the more dependent countries are also less prosperous (Craig, 1996 thesis) In order for these backward countries to development they must disassociate themselves from all relations with the First World.

Criticism of Dependency
See economic growth as the main component of development Maintain the idea that Tradition is the main obstacle to development If Western colonialism and Imperialism is the main reason for underdevelopment in the Third World, What aboout China, Ethopia were colonies of western Europe and are developed. Impractical ideas: If Third World Countries totally dissociate themselves from First they will not gain development. The relationship between Third world and First World is not dependent but interdependent. Globalization Undermines the ability of the States to charter development: (Russia and Germany) Does not explain the relevance of the Situation of the New International Division of Labour.

Is the Dependency relevant to World Development today ?

From Costa Rican beef to United states Hamburgers Mark Edelman. Costa Rica became the third largest supplier to beef to the United States. 1980s over 1 million hectares of land converted for cattle rearing. The result- Increasing unemployment 47.7% and increase in importation of Rice and other food product including hamburgers and grind beef. What explanation could be given for this? The most logical: Dependency would outline that Costa Ricas underdevelopment is as a result of such phenomena of developing countries being primary producers and producing only what developed country needs Dependency theory explains that development does not occur in isolation. But there are a number of internal and external factors that conditions it