DEPENDENCY

DEPENDENCYTHEORY
THEORY
AND
AND
THE
LATIN
THE
AMERICAN
LATIN AMERICAN
EXPERIENCE
EXPERIENCE
 LATIN AMERICAN EXPERIENCE

DEPENDENCY THEORY AND

THE LATIN AMERICAN
EXPERIENCE
DEPENDENCY THEORY AND THE
LATIN AMERICAN EXPERIENCE
Histor
y
Starting in the 1500s, European explorers
1500s
spread throughout the Americas, Africa, and
Asia, claiming lands for Europe. At one point,
the British Empire covered about one-fourth of
the world.

With colonialism came the exploitation of both

natural and human resources.
 Translantic Slave
Trade
Followed a triangular
route between Africa,
the American and
Caribbean colonies,
and Europe.

1860
 Translantic Slave
Trade

Guns and factory-made goods were sent to Africa in exchange

for slaves, who were sent to the colonies to produce goods like
cotton and tobacco, which were then sent back to Europe . As
the slave trade died down in the mid-nineteenth century, the
point of colonialism came to be less about human resources
and more about natural resources.
Colonialis
m

However, the colonial model kept going strong. In 1870, only

10% of Africa was colonized . By 1940, only Ethiopia and
Liberia were not colonized. Under colonial regimes, European
countries took control of land and raw materials to funnel
wealth back to the West. Most colonies lasted until the 1960s
and the last British colony, Hong Kong, was finally granted
independence in 1997.
Questio
n

“Why are many countries

in the world not
developing?”
Traditional
Answer

ECONOMIC POLICIES FORM OF

GOVERNMENT
Countries are not pursuing the
right economic policies. a) Authoritarian - a single
person, group, or party holds
Ex: complete control over the
• Tariffs and trade protection government and citizens , often
• Investing in human capital suppresing individual freedoms
and infrastructure and opposition.

b) Corrupt government
 Latin American
Experience

Latin American scholars, however,

are critical of that answer and are
intrigued by their region’s Scholars

underdevelopment (Sanchez, 2014).

Dependency theory was a product of
this experience.
Questio
n

“What is dependency
theory?”
 Dependency
Theory

Dependency is the condition in which the development of the

nation-states of the South contributed to a decline in their
independence and to an increase in economic development of
the countries of the North (Cardoso and Felato, 1979). In
addition, it argues that liberal trade causes greater
impoverishment, not economic improvement to less developed
countries (Toye, 2003).
 Trade
Protectionism

Trade protectionism through import substitution is the key

to self-sustaining path to development, not liberal trade or
export. In other words, rather than focusing on what poor
countries are doing wrong, dependency theory focuses on
how poor countries have been wronged by richer nations.
 Global
Stratification

It further argues that the prospects of both wealthy and poor

countries are inextricably linked. In addition, it argues that
in a world of finite resources, we cannot understand why
rich nations are rich without realizing that those riches
came at the expense of another country being poor. In this
view, global stratification starts with colonialism.
Developer
s

Dependency theory was initially developed by Hans Singer

and Raul Prebisch in the 1950s and has been since then.
The two main sub-theories are the North American Neo-
Marxist approach and the Latin American structuralist
approach (Sanchez, 2014).
World System
Model

2. Core Countries
The terms “core nations” and
“peripheral nations” are at the
- more industrialized
heart of dependency theory.
nations who receive the majority
1.Peripheral nations - are
of the world’s wealth.
countries that are less
Although generally divided into
developed and receive an
core or peripheral, dependency
unequal distribution of the
theorist recognize that there are
world’s wealth.
number of different kind of
states in the world (Grosfoguel,
2000).
 Developed VS. Less
Developed

Another common assumption of the theory is that “even

after de-colonization, there are still important ties between
the developed and less developed countries, which mainly
consist in the exploitation of peripheral natural resources
and workforce by the center” (Anton, 2006, p2).
 Capitalist World
Economy
Dependency theorist saw that the development of peripheral
nations is stagnant because of the exploitative nature of the
core nations (Ferraro, 2008). Less developed periphery
countries are said to primarily serve the interests of the
wealthier countries and end up having little to no resources
to put toward their own development.
 Neo-Marxist
Approach
Andre Gunder Frank (1969) espoused the
North American Neo-Marxist approach.
He contended the idea that less developed Andre Guder Frank
countries would develop by following the
path taken by the developed countries.
Developed countries were undeveloped in
the beginning but not underdeveloped.
 Structuralist
Approach
Developed by Latin American scientists. Palma (1978)
noted that chief among the arguments accounting for Latin
American underdevelopment was the “excessive” reliance
on exports of primary commodities, which were the object
of fluctuating prices in the short term and a downward trend
in relative value in the long haul.
 Structuralist
Approach
Studies by Hans Singer documented a
secular deterioration in the terms of
trade of Latin American countries,
Raul Presbich
whereas Presbich can be credited for Head of UN’S Economic
Commission for Latin
explaining the factors underlying this America (ECLA)

downward trend (Sanchez, 2014).

Historical-Structuralist
Approach
While Raul Presbich focuses more on the technical details
of development economics, other authors like Cardoso and
Faletto set the foundations of the historical-structural
variant of the dependency theory. For them, dependency is
not a general theory of underdevelopment, but rather a
“methodology for the analysis of concrete situations of
dependency” (Cardoso & Faletto, 1979, p. 16).
Historical-Structuralist
Approach
“The idea of dependence refers to the condition under
which alone the economic and political system can exist and
function in its connections with the world productive
structure” (p. 18). It also held that dependency was
perpetuated by the ensemble of ties among groups and
classes between and within nations (Sanchez, 2014). This is
the concept of “linkage”.
Historical-Structuralist
Approach
“The identification of interest network---business,
technocrats, the military, the middle-class---that bind the
dynamics of local political and economic processes to
material and political interests in the industrialized world
(Sanchez, 2014, p. 4). This version saw development as
historically open-ended and allowed for the possibility that
nature of dependent relations could change over time.
The Modern World-System
 Core
Countries
The history of colonialism inspired American sociologist
Immanuel Wallerstein model of what he called the capitalist
world economy. Wallerstein described high-income nations
as the “core” of the world economy. This core is the
manufacturing base of the planet where resources funnel in
to become the technology and wealth enjoyed by the
Western world today.
Periphery
Countries

Low-income countries, meanwhile, are Wallerstein called

the “periphery,” whose natural resources and labor support
the wealthier countries, first as colonies and now by
working for multinational corporations under
neocolonialism.
Semi-Periphery
Countries

Middle-income countries, such as India or Brazil, are

considered the semi-periphery due to their closer ties to the
global economic core.
 Immanuel
Wallerstein
In Wallerstein’s model, the periphery remains economically
dependent on the core in a number of ways, which tend to
reinforce each other. First, poor nations tend to have few
resources to export to rich countries. However, corporations
can buy these raw materials cheaply and then process and
sell them in richer nations. As a result, the profit tend to
bypass the poor countries.
Immanuel Wallerstein’s
Model
Summar
y

In sum, under dependency theory, the

problem is not that there is a lack of
global wealth; it is that we do not
distribute it well.
Critics of Dependency
Theory
Critics argue that the world economy is not a zero-sum
game---one country getting richer does not mean other
countries are getting poorer. Innovation and technological
growth can spill over to other countries, improving all
nations’ well-being and not just the rich. Also, colonialism
certainly left scars, but it is not enough, on its own, to
explain today’s economic disparities.
Critics of Dependency
Theory
In direct contrast to what dependency theory predicts, most
evidence suggests that, nowadays, foreign investment by
richer nations helps and do not hurt poorer countries.
Dependency theory is also very narrowly focused. It points
the finger at the capitalist market system as the sole cause of
stratification, ignoring the role of things like how culture
and political regimes play in impoverishing countries.
Critics of Dependency
Theory
There is also no solution to global poverty that comes out of
dependency theory---most dependency theorist just urge
poor nations to cease all contact with the rich nations or
argue for a kind of global socialism. However, these ideas
do not acknowledge the reality of the modern world
economy, which make them not very useful for combating
real pressing problem of global poverty.
 Growth of World
Economy
But with increased trade between countries, trade
agreements such as the North American Free Trade
Agreement (NAFTA) have become a major point of debate,
pitting the benefits of free trade against the cost of jobs
within a country’s borders.

The share of people globally living on less than $25 per day
has more than halved since 1981 going from 52% to 22% as
of 2008.
THANK YOU!

BULOSAN, LEAN JUSTICE

TALA, KEZIA