You are on page 1of 11



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

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


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



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

m An example is ?.

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

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     

[ 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.

 [ 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     

  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

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

r 6xamples Mexico, Brazil.

m However, these countries on the ͚semi-periphery͛ suffer 

 , underutilization and      d  ,   
and     .

m Growth was possible,     


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

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

r Integration into the global 


, but
  d        .