Dependency theory is a sociopolitical and economic theory that seeks to explain the underdevelopment and persistent poverty of certain countries in the global South. It emerged in the 1950s and 1960s as a response to the perceived limitations of traditional development theories. Here are the salient features of dependency theory:
Core-Periphery
Structure: Dependency theory argues that the global economic system is
characterized by a core-periphery structure. The core countries, typically
industrialized and capitalist, dominate and exploit the peripheral countries,
which are usually developing and reliant on exporting primary commodities. The
core countries extract resources and wealth from the periphery, perpetuating an
unequal and exploitative relationship.
Delineate the salient
features of dependency theory of underdevelopment
Unequal
Exchange: Dependency theory contends that the international trade system is
biased in favor of the core countries. It argues that the prices of primary
commodities produced by the periphery are artificially depressed, while
manufactured goods from the core are sold at higher prices. This unequal
exchange perpetuates the dependence of peripheral countries on core nations and
limits their ability to accumulate capital for development.
Limited
Economic Diversification: Dependency theory suggests that peripheral countries
often have limited economic diversification. They are primarily oriented
towards producing and exporting raw materials or agricultural products, which
leaves them vulnerable to fluctuations in global commodity prices. The lack of
diversification hampers their ability to develop robust domestic industries and
move up the value chain.
Technological
Dependency: Dependency theory highlights the technological dependence of
peripheral countries on the core. Core nations typically have advanced
technologies, while peripheral countries often rely on importing technology
from the core. This technological dependency restricts the ability of
peripheral countries to innovate and develop their own technological
capabilities.
Capital Flight
and Debt: Dependency theory argues that the flow of capital from the periphery
to the core exacerbates underdevelopment. Capital flight occurs as profits,
revenues, and resources generated in the peripheral countries are transferred
to the core countries through mechanisms such as foreign direct investment and
debt repayments. This limits the availability of capital for investment and
development within the peripheral countries.
Role of
Imperialism: Dependency theory emphasizes the historical and ongoing role of
imperialism in perpetuating underdevelopment. It argues that colonialism and
neocolonialism have created and maintained the dependency relationship between
the core and peripheral countries. Imperialist powers are seen as having shaped
the economic, political, and social structures of peripheral nations to serve
their own interests.
Emphasis on
Structural Change: Dependency theory calls for structural change as a means of
breaking free from the dependency relationship. It advocates for policies that
prioritize domestic industrialization, import substitution, and the development
of internal markets. The theory also emphasizes the need for collective action,
regional integration, and increased South-South cooperation among peripheral
countries to counter the dominance of the core.
Dependency
theory has been influential in challenging mainstream development theories and
highlighting the power dynamics and structural inequalities that underlie
global economic relations. However, it has also faced criticism for its
generalizations, lack of attention to internal factors, and the limited success
of policy recommendations based on its framework. Nonetheless, it remains an
important perspective in the analysis of underdevelopment and inequality in the
global South.
The dependency
theory of underdevelopment is a critical perspective that seeks to explain the
persistent economic and social underdevelopment of certain countries in the
global South. It emerged in the 1950s and 1960s as a response to the perceived
limitations of traditional development theories and the impact of colonialism
on developing nations. The theory highlights the role of external forces,
particularly the global capitalist system and the dominance of developed
countries, in perpetuating underdevelopment. Here are the key features of the
dependency theory of underdevelopment:
Core-Periphery
Relationship: Dependency theory posits that the global economic system is
characterized by a core-periphery relationship. The core countries, usually
industrialized and economically advanced, dominate and exploit the peripheral
countries, which are typically less industrialized and reliant on exporting
primary commodities. This relationship is characterized by the extraction of
resources, capital, and wealth from the periphery by the core.
Unequal
Exchange: The theory argues that international trade is structurally biased in
favor of the core countries. Peripheral countries are primarily exporters of
raw materials and agricultural products, which have low value in global
markets. In contrast, the core countries export manufactured goods, which
command higher prices. This unequal exchange perpetuates the dependency of
peripheral countries on the core and limits their ability to accumulate capital
for development.
Capital Flight
and Financial Dependence: Dependency theory highlights the flow of capital from
the periphery to the core as a significant factor in underdevelopment. This
capital flight occurs through mechanisms such as foreign direct investment,
repatriation of profits, and debt repayments. The outflow of capital from the
periphery to the core exacerbates underdevelopment by reducing the availability
of investment funds and hindering domestic economic growth.
Technological
Dependence: Dependency theory emphasizes the technological dependence of
peripheral countries on the core. Core countries possess advanced technology,
while peripheral countries often rely on importing technology from the core.
This technological dependence limits the ability of peripheral countries to
develop their own technological capabilities and stifles their capacity for
innovation and industrialization.
Limited
Economic Diversification: The theory argues that underdevelopment is
exacerbated by the limited economic diversification of peripheral countries.
These nations are often specialized in the production and export of primary
commodities, which leaves them vulnerable to fluctuations in global commodity
prices. The lack of economic diversification hampers the development of
domestic industries and inhibits the ability to move up the value chain.
Role of
Imperialism: Dependency theory emphasizes the historical and ongoing impact of
imperialism and colonization on underdevelopment. It argues that colonial
powers shaped the economic, political, and social structures of peripheral
countries to serve their own interests. The legacy of imperialism, in terms of
unequal power relations and economic structures, continues to perpetuate
underdevelopment.
Collective
Action and Self-Reliance: Dependency theory emphasizes the need for collective
action and self-reliance among peripheral countries. It calls for regional
integration, increased South-South cooperation, and the formation of economic
blocs to counter the dominance of the core and reduce dependency. The theory
suggests that breaking the cycle of underdevelopment requires structural change
and the pursuit of alternative development strategies that prioritize domestic
industrialization and internal markets.
Critics of the
dependency theory argue that it oversimplifies the complexity of
underdevelopment, neglects internal factors within peripheral countries, and
does not fully account for the agency of developing nations. Nonetheless, the
theory remains influential in highlighting the structural inequalities and
power dynamics that contribute to underdevelopment and calls for transformative
changes to address these issues.
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