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dependency theory

  A complex body of theory with structuralist, Marxist and Latin American roots which explains the blocked or \'distorted\' character of Third World development through the powers of external (colonial or post-colonial) metropolitan powers to exploit peripheral satellites (see accumulation; colonialism; core-periphery model; development; underdevelopment; uneven development). Dependency emerged as a critique of modernization theory and economic dualism, arguing that Third World poverty was not a function of local failure but rather was a function of the history of the dialectical relations between metropole and satellite. At the heart of the theory stands a claim about the dominant role of external (i.e. global) powers and the super-exploitation by which the metropole subordinates the satellite. The peripheries supplied primary products and low-technology manufactures for the First World in exchange for high technology, high value-added goods. Economic dependency was further expressed through political and cultural neo-colonialism. This process is captured in Gunder Frank\'s (1967) notion of the development of underdevelopment. Dependency as a concept implies that the pace, character and timing of national accumulation is determined by non-local (external) forces (Santos 1970). To the extent that accumulation does occur in the periphery it is located in satellite regions which are directly linked to, and regulated by, the metropole.

Dependency theory has strong Latin American roots (the dependistas) which can be traced to the debates surrounding trade and the global market in the 1950s. Like other parts of the periphery, the colonial experience in Latin America had produced economic trajectories based on outward-oriented primary commodity exploitation. During the 1930s exports of primary products collapsed and Latin American governments often turned to import-substituting industrialization. After the Second World War, however, Latin America lost US$13.4 billion due to the deterioration in relative prices. The structuralist approach of Raul Prebisch (1950) at the Economic Commission for Latin America (ECLA: founded in 1948) addressed the problems of primary export dependency, and the problems of specialization within a Ricardian theory of trade (see neo-Ricardian economics). The Prebisch thesis claimed that the global system was not a uniform marketplace but was divided structurally between rich and poor economies (cf. North-South). ECLA focused on the self-contained nature of the US economy, on terms of trade, the post-1945 dollar shortage and global finance. From this emerged a two-prong development strategy: the need for regional cooperation in Latin America and the need for more liberal trade and financial policies by the capitalist powers.

The emphasis on structural constraints paved the way for Keynesian and Marxist-inspired intellectuals such as André Gunder Frank, Celso Furtado and Henrique Cardoso (the President of Brazil) to formulate a full-blown theory of dependency. Furtado\'s (1965) account of the Brazilian crisis is an exemplary text. He points to the importance of studying the forms of colonial and post-colonial incorporation into the world economy. He shows the contradictions and limits of both import-substitution and primary export orientation, and the centrality of what he calls institutional arrangements — class relations — in explaining the truncated forms of accumulation and industrialization. Cardoso and Faletto (1970) provide a powerful historical and political analysis of dependency effectively employing the categories of class to make a strong normative argument for the role of a developmental state, the regulation of transnational capital flows, and for regional cooperation. An important study of the contemporary forms of dependent development was undertaken by Peter Evans (1979) who showed, in the case of Brazil, how key sectors were dominated by transnational capital and who exercised control through direct foreign investment and through the control of production technologies (cf. transnational corporations). Dependency is seen to increase both geographical uneven development — the islands of development thesis — and also internal social stratification. Dependency theory was stagnationist, an argument about class (its non-bourgeois character) and state (its neo-colonial character), and a case for the non-dynamic role of agriculture and the centrality of mechanisms of surplus transfer (cf. Marxian economics).

Dependency theory was heavily criticized in the 1970s, a critique driven in part by the changing realities of the world economy (Palma, 1978). If the terms of trade crisis of the 1950s provided the ether in which Prebisch developed his incipient dependista position, the 1970s of the Asian tigers framed the critique. Warren (1974) argued that dependency was in practice the theory of the national bourgeoisie and argued that capitalism was indeed a progressive and radical force which dependista-inspired theories of autarky or delinking (or import-substitution) ignored at their peril. Like populism, dependency theory gave primacy to exploitation in the realm of exchange (Kitching, 1982). While dependency theory reached its apogee during the 1960s and 1970s — as many of its intellectual leaders were compelled to flee the region in the face of the militarization there — it has nonetheless continued to be a rich source of ideas. Enriched by theories of imperialism, and by debates over modes of production, it also provided fuel for world-systems analysis. Indeed dependency theory has been \'regionalized\' in a number of ways as its ideas were taken up, appropriated and made to speak to the specificities of Africa (Amin, 1976), India and elsewhere (Preston, 1996). In the context of the increasing polarity between North and South in the late twentieth century, dependista concerns with uneven development, technological polarization, and trade have experienced a new lease of life (Blaney, 1996). (MW)

References Amin, S. 1976: Unequal development. New York: Monthly Review. Blaney, N. 1996: Reconceptualising autonomy. Review of International Political Economy 4 (4): 459-97. Cardoso, F.H. and Faletto, E. 1970: Dependency and development. Berkeley: University of California Press. Evans, P. 1979: Dependent development. Princeton: Princeton University Press. Furtado, C. 1965: Diagnosis of the Brazilian crisis. Berkeley: University of California Press. Gunder Frank, A. 1967: Capitalism and underdevelopment in Latin America. New York: Monthly Review. Kitching, G. 1982: Development and underdevelopment in historical perspective. London: Methuen. Palma, G. 1978: Dependency and imperialism. World Development 8. Prebisch, R. 1950: The economic development of Latin America. New York: United Nations. Preston, P. 1996: Development theory. Oxford: Blackwell. Santos, T. 1970: Imperialismo y dependencia. Mexico City: Ediciones Era. Warren, B. 1974: Imperialism: pioneer of capitalism. London: Verso.



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