Dependency Theory – Revision Notes

Dependency Theory claims that Colonialism had a negative impact on the satellite territories in Africa, Asia and Latin America; that neocolonialism keeps the ex colonial master rich and the ex colonies poor, and that in order to develop the ex colonies need to isolate themselves from the capitalist system, protect themselves from the ‘free market’ and develop internally, through socialism for example.

Colonialism made rich countries rich and poor countries poor

1. Stealing land and resources which decimated local populations through slavery, disease and displacement of local populations.
2. Increasing ethnic conflict by selecting one ‘pro-European group’ to govern over all other ethnic groups in the territories.
3. Turning the colonies into mono-crop plantation systems, dependent on low value agricultural exports, which hampered their development post-independence.
4. MOST IMPORTANTLY (and most difficult to understand and evaluate) – colonialism established a world capitalist system which locked poorer countries into unequal power relations with richer countries – if poor countries wished to develop within the system, they required expensive imports from the industrialised European powers. For this reason, poor countries will always remain poor within this system.

Neo-Colonalism keeps poor countries poor because:

1. Unfair terms of Trade and unfair trade rules lock poor countries into unequal relationships with the west
2. Transnational Corporations play a major role in exploiting countries today, not just rich countries
3. Aid through the World Bank is used by rich countries to promote ‘neoliberal’ policies which make rich countries easier to exploit.

To develop, developing countries need to isolate themselves from the capitalist system (protectionism)

Dependency Theory argued  that developing countries should seek to break away from the world capitalist system and find their own path way to development – mainly through socialism – development through socialism means countries focus on their own development, seeking to produce everything for themselves rather than integrating into a global trade system.