Essay on Dependency Theory

 

Evaluate explanations of development and under-development put forward by dependency theorists (33)

The plan below is just one suggestion as to how you might go about answering this essay. 

Briefly introduce Dependency Theory

  • Dependency theory is a Marxist theory, developed in the 1970s as a criticism of Modernisation theory. The best known dependency theorist is Andre Gunder Frank

  • Underdevelopment is because the West exploits labour and resources in the developing world. The West gets rich at the expense of the developing world. This is in contrast with the modernisation theory which tends to assume that lack of development is because of internal cultural and economic barriers.

  • Dependency theorists see history as essential to understanding the situation that we are in today, pointing out that many civilizations were wealthy and complex before contact with the west –such as Aztec culture in Mexico and Chinese and Indian civilizations. It is only after Colonialism that these countries become poor relative to the West.

  • During Colonial Rule the core nations of the west exploited the satellite nations of the developing world.

  • More recently Neo-Colonialism keeps developing countries poor –

The Legacy of Colonialism

  1. Colonialism – Where European Nations (core nations) took over other territories and turned them into satellite nations, essentially becoming the property of those nations and being subject to their laws.

  1. Colonies were then run for the benefit of the core nations, with resources such as gold, silver and exotic foods being extracted from the colonies and exported to the west for immense profit. Local populations were often turned into slaves and controlled by occupying military forces.

  1. This process locked much of Africa, Asia and Latin America into exploitative relationships with Western European Nations from about 1650 – 1900.

  1. When ex-colonies gained independence from their Colonial masters (in Africa through the 1960s) they struggled to develop because of the damage done to them by Colonial rule. Two ways in which this happened are as follows:

  1. Colonial powers turned the colonies into ‘monocultures’ – each country was used to grow and export only one or two products that were best suited to that climate. This has had a lasting consequences – Today, at least two thirds of African countries derive over 50% of their export earnings from only one or two commodities. Today, many African countries are still dependent on low value exports for much of their GDP which prevents them from developing.

  1. Divisions and conflicts between ethnic groups were created during colonialism as those tribes loyal to the colonising powers were given economic and political power. It tended to be those tribes that came to power following independence, causing heightened tension between them and opposing ethnic groups. The worst case of this is the Rwandan Genocide of the 1990s.

Neo-colonialism

According to dependency theorists although colonies have gained political independence, they are still exploited economically by more developed countries – a situation which Frank describes as Neo-Colonialism. Neo-Colonialism takes the following forms

  1. Unfair Trade Rules World trade is not a level playing field – The best example of this is in Agriculture – Agriculture is Africa’s biggest economic sector. It has the capacity to produce a lot more food and export to Europe and America but it can’t because the EU and America spend billions every year subsidising their farmers so imported African products seem more expensive

  1. Tied Aid – Aid packages from the World Bank often come with strings attached – In return for a development loan, for example, a country might be asked to privatise certain sectors and allow Western companies in to run those services, ultimately benefitting western interests.

  1. Western Corporations use their economic power to negotiate favourable tax deals in the developing world. A good case in point here is the mining Company Glencore in Zambia – The company recently arranged a long term contract to mine copper with the Zambian government – it exports $6 billion a year in copper from Zambia, but pays only $50m in tax, while as part of the deal the Zambian government is contractually obliged to pay for all the electricity costs of mining – a total of $150m a year.

STRATEGIES FOR DEVELOPMENT

For some dependency theorists, underdevelopment appears permanent; the only way out of dependency is for an underdeveloped nation to escape from the global capitalist system and master-servant relationship with richer countries, taking action itself rather than relying on outside help. Countries need to find alternative pathways to development that protect their fragile economies from Western Capitalist-Industrialist Capitalism. Some alternatives include:

Isolation, as in the example of China from about 1960 to 2000, which is now successfully emerging as a global economic superpower having isolated itself from the West for the past 4 decades. Another, different example, is that of Bhutan.

Socialist revolution as in the case of Cuba. This resulted in sanctions being applies by America which limited trade with the country, holding its development back.

  • Alternatively there is Associate or dependent development. – Here, one can be part of the system, and adopt national economic policies to being about economic growth such as. Import substitution industrialisation where industrialisation produces consumer goods that would normally be imported from abroad, as successfully adopted by many South American countries.

Evaluation

  1. Some countries benefited from Colonialism – India for example benefitted from the transport networks put in place under British Colonial Rule, whereas many countries that were never colonised, such as Afghanistan, are much less developed.

  1. Modernisation theory would argue that at least some satellite nations have benefited from TNC investment, as with the Asian Tiger economies such as Korea benefited from investment by Japanese TNCs.

  1. Neoliberalism points out that it would be wrong to purely blame western TNCs for the dependency of Satellite Nations. Corrupt governments are just as much to blame today.

  1. Paul Collier’s theory of the bottom billion suggests there are more reasons other than Colonialism that explain why certain countries are underdeveloped. Two of these include the ‘resource curse’ and ‘corruption’

Conclusion

It is important to recognise that the history of colonialism has held some countries back, and that isolation has worked as a route to development for some nations such as China. However, in today’s rapidly changing, ex-colonial world, in which many ex-colonies are developing successfully and even due to overtake European Nations by 2050 (India and Brazil) it is clear that in the long term Dependency Theory is not sufficient to explain why some countries are developed and others are developing.

Having said this it does need to be recognised that in many countries neo-colonialism does seem to prevent development, and the idea that the west needs to look at how its policies affect developing countries is also sensible. and moreover it is unclear that this model of development which defines development as being characterised by industrialisation, strong nation states, and economic growth is applicable today – It might be the case that alternative models and notions of development are the only way to guarantee the long term sustainable future of the 7 billion people on earth today.

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