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m Dependency theories gained traction for a brief


period of time in the late 60͛s ʹ mid 70͛s.
m They built on the STRUCTURALIST theories that had
preceded them by perceiving the World not only as
dualistic, but stagnant in its relations.
m ë   Group of ͚Core͛ developed nations
were exploiting the ͚Periphery͛ developing nations.
There was a ͚cause͛ and ͚effect͛ relationship between
the two regions.
m Internal institutional problems were either played
down or portrayed as a legacy of colonialism.
     

m The theories gained traction with populist Governments due to portraying poor
conditions as the result of external factors. Culturally, the idea was given traction
by ? 
who contended that the US had material gains but had d 
  

 
  

 
 they were ͚  ͛.

m 6conomically, the ͚Big Push͛ of the early ISI period (50͛s/60͛s) had d   
 d    dd [ there had only been moderate growth.

m The      d     noted that ISI had resulted
in

r xd   d  .

r Shortage of FX and increase in foreign debt.

r ¦   

r Foreign ownership of the economy by TNCs.

m A contrary effect of ͚     ͛ (Myrdal) could be observed, where


backwash effects were compounding, rather than dissolving, dualism.

r Developing nations were using capital-intensive technologies as part of their


industrialisation[           .
     

m Underlying conditions of dependency


r     , large import/GDP.

r    dand in d   

r ‰      the financial and industrial


sector.

m Structural results of dependency


r Income, employment and growth determined by
    ,  d by transnational
corporations (TNCs).

r Income, employment and growth conditioned by


  d    and changes in prices of imports.

r  d     

r         .


     

m Although Dependency Theory was a ͚  d ͛ (Kay, 1989) due to the  d

  
d, theories tended to consider four channels through which
dependency was propagated

I. Asymmetric Trade Relations

r There was      d  , where developed countries


produce high-value manufactures that could be consumed by the peripheral
͚elite               

 

II. TNCs

r   d, used    


  ,  
 d  via minimal backwards and forwards linkages
and human capital development.

III. International Banking

r ¦    d   (reducing ability to import foreign capital),
acted as a d  .

IV. Drugs Trade

r   domestically, as well       (see


Colombia),  .
     

m Dependency theorists took a 


   of the dire state of developing
countries.

m An example is ?.

r Baran argued that the key to growth was the proper use of ͚6conomic Surplus͛
   d d 
 d  
 



r TNCs and foreign powers used the four channels noted prior to extract that
surplus, preventing it from being used to aid development.

r The roots of this surplus exploitation went back to the   
    [ extractive institutions aimed at benefiting the mainland
and a few elite.

r In turn, the new elite (TNCs)aimed to harvest and repatriate the economic
surplus for themselves, and prevent economic development due to
   

    d    d d  

  ‰          

r Thus, foreign capital diminished the potential for economic development.


     

m    considers the effect of inherited institutions on


development .

r Notes that M likens the Latin American (Latam) institutions to


͚Hedgehogs͛ ud

    
d  
   
d  [ characterised by the  d   ).

r Yet, likens 6uropean + N.A institutions to ͚Foxes͛ ( 




  [
characterised by the    ).

r Also argues that Iberian colonialists wanted to establish an ͚  d


 ͛ but 6ngland wanted an   d ͛ (although 6nglish
colonies lacked the resource intensities of Iberian ones anyway).

m 6dwards also noted that the a    


    in
Latam (    ), had an      (from
attempting to exploit Latam, to trying to develop it ʹ Alliance of Progress ʹ
and ignoring it).

m The US was thus perceived     


d 
 
[ also Americans were hostile to the US being perceived to claim the
title ͚America͛ ʹ they are all Americans.
     

m Dependency theory began to fall out of favour  


 for a
range of reasons

r It had a    ͞Dependent countries lack the capacity for
economic growth and they lack this because their structures are
dependent ones.͟

r It is  , such that there are little useful policy proposals
outside of autarky.

r It     


   x was booming ͚despite͛
close integration into the World 6conomy.

r    d      


 
[ the creation of NAFTA, the attempt at the ͚Alliance for
Progress͛ with the US.

r  
  
 [ with little coherency between
different theories of dependency, there was no comprehensive,
alternative, strategy for growth.

r The d  d    [ Dependency theory was


closely allied with Marxism.
     

m Dependency theory thus     


d 
 
  of the ͚periphery͛ and ͚core͛.

m    made a compelling argument that one should not view the


peripheral nations as powerless to shape their destiny. He saw 3 broad stages
of development having occurred in Latam

r       . Blatant dualism.

r  ¦¦   . Developmentalist alliance between industrial workers,


government, the elite and the agro-export sector.

r ? d        . Drastic curbs on democracy,


dismantled infant welfare state, the central importance of TNCs.

m The nature of dependency was therefore variable over time.

m Cardoso believed         



    
d d
d, preventing a purely extractive
relationship.
     

m wther theorists began to deconstruct dependent states, noting the crippling


generality of the dependency movement.

m   distinguished an intermediate state, located between d 





 (that appeared to be unable to autonomously determine their
own path) and 
 

 


.

r   is a special instance of dependency, characterised


by the association or alliance of international and local capital.

r Dependent development nations were on the periphery,    


  (which contradicts traditional dependency
theorists).

r 6xamples Mexico, Brazil.

m However, these countries on the ͚semi-periphery͛ suffer 


 , underutilization and      d  ,   
and     .

m Growth was possible,     


  
d  
     

m With the  d     , a new dependency movement has been


called into action.

m    makes two claims

r That Washington-based international organisations and financial institutions keep


the periphery in check by imposing strict conditions on loans, which means the
economic surplus accumulated by a developing nation is extracted by Western
powers.

r The new dependency associated with globalization is presented as interdependence


in order to obfuscate the asymmetries in the new order.

m     however, has a rebuttal

r Admits that globalization means that a country       


 
  , and that other countries͛ political/economic upheaval
  
  

r But,      than just being determined by


external factors.

r A  
   d  [ diversify exports and prop up domestic
savings.

r Integration into the global 


  



, but
  d        .