Dependency Theory Analysis Essay Example

as to whether a transformation from being primary products producers was possible or desirable. The final issue revolved around the extent to which the poorer countries actually had control of their primary products, particularly in the area of selling those products abroad.

These obstacles to the import substitution policy led others to thinka little more creatively and historically at the relationship between rich and poor countries. At this point dependency theory was viewed as a possible way of explaining the persistent poverty of the poorer countries. The traditional neoclassical approach said virtually nothing on this question except to assert that the poorer countries were late in coming to solid economic practices and that as soon as they learned the techniques of modern economics, then the poverty would begin to subside.However, Marxists theorists viewed the persistent poverty as a consequence of capitalist exploitation. And a new body of thought, called the world systems approach, argued that the poverty was a direct consequence of the evolution of the international political economy into a fairly rigid division of labor which favored the rich and enalized the poor. How Can One Define Dependency Theory? The debates among the liberal reformers (Prebisch), the Marxists (Andre Gunder Frank), and the world systems theorists (Wallerstein) was vigorous and intellectually quite challenging.

There are still points of serious disagreements among the various strains of dependency theorists and it is a mistake to think that there is only one unified theory of dependency. Nonetheless, there are some core propositions which seem to underlie the analyses of most dependency theorists. Dependency can be defined as an explanation of the economic development of a tate in terms of

the external influences--political, economic, and cultural--on national development policies (Osvaldo Sunkel, "National Development Policy and External Dependence in Latin America," The Journal of Development Studies, Vol. no. 1, October 1969, p. 23).

Theotonio Dos Santos emphasizes the historical dimension of the dependency relationships in his definition: [Dependency is]... an historical condition which shapes a certain structure of the world economy such that it favors some countries to the detriment of others and limits the development possibilities of the subordinate economics..

. situation in which the economy of a certain group of countries is conditioned by the development and expansion of another economy, to which their own is subjected.Theotonio Dos Santos, "The Structure of Dependence," in K. T. Fann and Donald C.

Hodges, eds. , Readings in U. S. Imperialism. Boston: Porter Sargent, 1971, p. 226) There are three common features to these definitions which most dependency theorists share.

First, dependency characterizes the international system as comprised of two sets of states, variously described as dominant/dependent, center/ periphery or metropolitan/satellite. The dominant states are the advanced industiral nations in the Organization of Economic Co-operation and Development (OECD).The dependent states are those states of Latin America, Asia, and Africa which have low per capita GNPs and which rely heavily on the export of a single commodity for foreign exchange earnings. Second, both definitions have in common the assumption that external forces are of singular importance to the economic activities within the dependent states. These external forces include multinational corporations, international commodity markets, oreign assistance, communications, and any other means by which the advanced industrialized countries can represent their economic interests abroad.Third, the definitions of dependency all indicate that the

relations between dominant and dependent states are dynamic because the interactions between the two sets of states tend to not only reinforce but also intensify the unequal patterns.

Moreover, dependency is a very deep-seated historical process, rooted in the internationalization of capitalism. Dependency is an ongoing process: Latin America is today, and has been since the sixteenth century, part of an nternational system dominated by the now-developed nations...

.Latin underdevelopment is the outcome of a particular series of relationships to the international system. Susanne Bodenheimer, "Dependency and Imperialism: The Roots of Latin American Underdevelopment," in Fann and Hodges, Readings, op. cit. , p.

157. In short, dependency theory attempts to explain the present underdeveloped state of many nations in the world by examining the patterns of interactions among nations and by arguing that inequality among nations is an intrinsic part of those interactions. The Structural Context of Dependency: Is it Capitalism or is it Power?Most dependency theorists regard international capitalism as the motive force behind dependency relationships. Andre Gunder Frank, one of the earliest dependency theorists, is quite clear on this point: ..

. historical research demonstrates that contemporary underdevelopment is in large part the historical product of past and continuing eonomic and other relations between the satellite underdeveloped and the now developed metropolitan countries. Furthermore, these relations are an essential part of the capitalist system n a world scale as a whole.Andre Gunder Frank, "The Development of Underdevelopment," in James D. Cockcroft, Andre Gunder Frank, and Dale Johnson, eds.

, Dependence and Underdevelopment. Garden City, New York: Anchor Books, 1972, p. 3. According to this view, the capitalist system has enforced a rigid international division of

labor which is responsible for the underdevelopment of many areas of the world. The dependent states supply cheap minerals, agricultural commodities, and cheap labor, and also serve as the repositories of surplus capital, obsolescent technologies, and manufactured goods.These functions orient the economies of the dependent states toward the outside: money, goods, and services do flow into dependent states, but the allocation of these resources are determined by the economic interests of the dominant states, and not by the economic interests of the dependent state.

This division of labor is ultimately the explanation for poverty and there is little question but that capitalism regards the division of labor as a necessary condition for the efficient allocation of resources.The most explicit manifestation of this characteristic is in the doctrine of comparative advantage. Moreover, to a large extent the dependency models rest upon the assumption that economic and political power are heavily concentrated and centralized in the industrialized countries, an assumption shared with Marxist theories of imperialism. If this assumption is valid, then any distinction between economic and political power is spurious: governments will take whatever steps are necessary to protect private economic interests, such as those held by multinational corporations.

Not all dependency theorists, however, are Marxist and one should clearly distinguish between dependency and a theory of imperialism. The Marxist theory of imperialism explains dominant state expansion while the dependency theory explains underdevelopment. Stated another way, Marxist theories explain the reasons why imperialism occurs, while dependency theories explain the consequences of imperialism. The difference is significant.

In many respects, imperialism is, for a Marxist, part of the process by which the world is transformed and is therefore

a process which accelerates the communist revolution.Marx spoke approvingly of British colonialism in India: England has to fulfil a double mission in India: one destructive, the other egenerating--the annihilation of old Asiatic society, and the laying of the material foundations of Western society in Asia. Karl Marx, "The Future Results of the British Rule in India," New York Daily Tribune, NO. 3840, August 8, 1853. For the dependency theorists, underdevelopment is a wholly negative condition which offers no possibility of sustained and autonomous economic activity in a dependent state.

Additionally, the Marxist theory of imperialism is self-liquidating, while the dependent relationship is self-perpetuating. The end of imperialism in the Leninist ramework comes about as the dominant powers go to war over a rapidly shrinking number of exploitable opportunities. World War I was, for Lenin, the classic proof of this proposition. After the war was over, Britain and France took over the former German colonies.

A dependency theorist rejects this proposition. A dependent relationship exists irrespective of the specific identity of the dominant state.That the dominant states may fght over the disposition of dependent territories is not in and of itself a pertinent bit of information (except that periods of fighting among ominant states affords opportunities for the dependent states to break their dependent relationships). To a dependency theorist, the central characteristic of the global economy is the persistence of poverty throughout the entire modern peri od in virtually the same areas of the world, regardless of what state was in control. Finally, there are some dependency theorists who do not identify capitalism as the motor force behind a dependent relationship.

The relationship is maintained by a system

of power first and it does not seem as if power is only supported by capitalism. For example, the relationship between the former dependent states in the socialist bloc (the Eastern European states and Cuba, for example) closely paralleled the relationships between poor states and the advanced capitalist states. The possibility that dependency is more closely linked to disparities of power rather than to the particular characteristics of a given economic system is intriguing