DEPENDENCY THEORY

Some background
-Developed by a UN Director, Raul Prebich in late 1950s in response to
concern over disparities in development worldwide

Peripheral Countries
-Nations that are “weaker” or less developed
- e.g. Haiti – received unequal distribution of the world’s wealth

Core Countries
-Nations that have major influence, and are the most developed
- e.g. United States, France)
-- Received majority of the world’s wealth; highly industrialized
nations
What is the theory?

-Dependency Theory think of development of some nations are

stagnant because of the exploitative nature of the previous core
countries
- Less developed periphery countries are said to primarily served the
interest of the wealthier countries and end up having little resources to
put toward their own development
- Peripheral nations are dependent on core countries
- Dependent nations’ development will remain stagnant while core
nations will continue to develop
- The theory points out that the economy of the periphery countries
rely on manual labor and export of raw materials to core nations
- The core countries then process these raw materials and sell them at a
much higher price and some of these manufactured goods go right
back to periphery nations end up spending more money on the
processed good and then get their raw materials
-Underdeveloped nations because of their small economy may also rely
on core nations for medical and nutritional aid
- The dependency theory describes the vicious cycle but enforces the
hierarchy of nations across the globe

Case Study: Haiti, a good example of how dependency theory

placed out in the real world
-A “peripheral” nation
- Belonged to France from 1660 to 1804
- During the French rule, produced 60% of Europe’s coffee and 40% of
its sugar came from Haiti. However, most of them did not received the
profit, much of the population was, and still is, impoverished
- In the 2011 earthquake
- destruction of much of its existing infrastructure
- United States response to earthquake was praised
- Haiti remains dependent on foreign aid from United States
and is on peripheral status and in low level of development and HDI of
0.454
Strengths:

- simplicity
-Worldwide theory
- has multiple applications
- easy to understand
- examine the interrelations of nations across the world
- is not limited to explaining individual countries without
an idea of the world as a whole
- the theory can also be applied to a national rather than
international scale and can also explain the economic
disparities between regions of the same country such as
comparison between rural and urban areas
Weaknesses:

- Promotion of the dominance of core nations by portraying periphery

countries as hopeless cases that will always remain undeveloped
-In this way the dependency theory is made for the continuous
advancement of core nations
- Limited definition of development
- Theory focuses mainly on economic development on the effective
capitalism of economic growth instead of taking into account different
areas of development i.e. a country may have excellent public services
i.e. education and health care without its citizens having large salaries
- Cynical and does not come supportive of overwhelming evidence
- Too simple
- With periphery looked as weak
Weaknesses:

-Looking at case studies from around the world,

development is not a stagnant entity from 1980 – 2011
South Korea’s HDI soared from an index of 0.634 to 0.897
- Tunisia meanwhile rocketed of the chart from an HDI
of 0.545 to 0.698 while it is true that most developed
western nations have remained at high stages of
development over the past 50 years or so
- The so-called periphery nations of yesterday have
generally shown upward trend in development
- The dependency theory is too simple, it does not look at
all the factors that play and fails to look beyond the black
and white
Weaknesses:

-Although they offer an appealing explanation of why many poor

countries remain underdeveloped, they give no insight into how
countries initiate and sustain development
- The actual economic experience of developing countries that have
pursued revolutionary campaigns of industrial nationalization and state-
run production has been mostly negative
- If we are to take dependence theory at face value, we would conclude
that the best course for developing countries is to become entangled as
little as possible with the developed countries and instead pursue a
policy of autarky , or inwardly directed development, or at most trade
only with other developing countries.
Autarky – a closed economy that attempts to be completely self-reliant
- But large countries that embarked on autarkic policies, such as China
and to a significant extent, India, experienced stagnant growth, and
ultimately decided to open their economies, China beginning this
process after 1978 and India after 1990.
Weaknesses:

-At the opposite extreme, economies such as Taiwan and South Korea,
and China more recently, that have most emphasized exports to
developed countries have not grown strongly
- Although in many cases close ties to metropolitan countries during the
colonial period apparently produced damaging outcomes – as in Peru
under Spain, the Congo under Belgium, India under Great Britain, and
West Africa under France – in a majority of cases, this relationship
appears to have significantly altered during the postcolonial period
- Clearly, however, conflict of interest between the developed and
developing worlds, such as took center stage at the Copenhagen Climate
Summit in December 2009 and have played a role in recent WTO and G20
meetings, are genuine and cannot be ignored