In this article, we shall discuss dependency theory as it pertains to international relations. We will discuss the various arguments within the dependency theory, as well as connect the theory to supporting arguments, all the while using different case studies to further illustrate the points and positions of dependency theory of development.
What is Dependency Theory?
Dependency theory of development is an international relations theory that examine the relationships and interactions often between Global North and Global South states, where the Global South states are often reliance on the Global North for trade, economic aid, etc… Viotti & Kauppi (2013) explain dependency in the following way: “Low-income countries of the South economically subordinated to the advantage of high-income countries of the First World or North; in class analytical terms, workers and peasants subordinated and exploited by capital-owning classes, the bourgeoisie” (521). There have been other definitions of dependency theory. Below, for example, is one video that explains dependency theory, and makes arguments as to what they view as strengths and weaknesses of dependency theory.
Others that have focused on dependency theory, in their writings, “describe the ways classes and groups in the ‘core’ link to the ‘periphery’. Underdevelopment and poverty in so many countries is explained as a result of economic, social, and political structures within countries that have been deeply influenced by their international economic relations. The global capitalist order within these societies have emerged is, after all, a global capitalist order that reflects the interests of those who own the means of production” (Smith & Owens, 2011: 253). Osvaldo Sunkel (1969) emphasizes the various, economic, cultural, and political levels of control or international influence upon the Global South state (in Ferrara, 1996). Others, such as Theotonio Dos Santos (1971) argued that “[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 lints the development possibilities of the subordinate economies…a 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” (in Ferrara, 1996).
Despite the fact that dependency theorists differ on some issues with regards to the theory (whether it is level of impact, or region/countries of analysis, the exact structure of the economic relationships, along with other issues), Ferrara (1996) argues that among the various identifications and understandings of dependency theory, there are a few points that scholars and theorists of dependency theory seem to be in agreement upon. He writes:
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 industrial nations in the Organization of Economic Cooperation 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 [Ferrara is referencing the definitions of Sunkel & Dos Santos] 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, foreign 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…
History of Dependency Theory
Dependency theory has its roots in Karl Marx’s work on economic structuralism and the economic relationships between economically rich and economically poor states. Karl Marx argues that the world system, and international relations are driven by economic power and exploitation. Namely, the economically rich take advantage of the economically poor, through their control of the economy. While they are looking to make profits for themselves, they are doing so at the expense of the poor individuals and/or countries.
Thus, while Marxist thought is the foundational point of dependency theory, the more modern formations of dependency theory can be traced back to the 1950s, to the work of Raul Presbisch. Presbisch, in studying international relations and issues of development, with particular attention to Latin American states, noticed something interesting. Namely, “Prebisch and his colleagues were troubled by the fact that economic growth in the advanced industrialized countries did not necessarily lead to growth in poorer countries. Indeed, their studies suggested that economic activity in the richer countries often led to serious economic problems in the poorer countries. Such a possibility was not predicted by neoclassical theory, which had assumed that economic growth was beneficial to all (Pareto optimal) even if the benefits were not always equally shared” (Ferraro, 1996).
And thus, because of the lack of explanation of this economic imbalance, and economic conditions that arise when the rich states were getting richer, Prebisch looked to explain what was happening. What he initially argued was that poor countries were sending their raw materials to the Global North, who in turn would turn these into finished products, then sell them back to the poorer states. These products were worth much more as finished goods, than they were as unfinished products. More specifically, “The formulation of a distinctly Latin American school of development is intimately related to the ECLA. In what is known as the “ECLA Manifesto,” R. Prebisch, who was the head of the ECLA, criticizes the outdated schema of the international division of labor. Under such schema, Latin America was asked to produce food and raw materials for the great industrial centers, and in return, Latin America would receive industrial goods from these centers. To Prebisch, this scheme was at the roots of the developmental problem of Latin America. Reliance on exports of food and raw materials would inevitably lead to a deterioration of Latin America’s terms of trade, which would further affect its domestic accumulation of capital” (So).
Because of this, Prebisch argued that the economically poorer states should shift their economy to one of import-substitution, which would allow them to avoid purchasing these products from the richer states, and instead, produce them domestically, and then could themselves sell them on the international market. However, scholars argue that there were some issues with this policy recommendation for global south countries. Ferraro (1996) argues that “Three issues made this policy difficult to follow The first is that the internal markets of the poorer countries were not large enough to support the economies of scale used by the richer countries to keep their prices low. The second issue concerned the political will of the poorer countries 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 think a little more creatively and historically at the relationship between rich and poor countries.” Speaking on the foundation of dependency theory, it is important to note that “The dependency school was also a response to the crisis of orthodox Marxism in Latin America in the early 1960s. From an orthodox communist viewpoint, the Latin American countries had to go through the stage of “bourgeois” industrial revolution before they could wage any “proletarian” socialist revolution. However, the Chinese Revolution in 1949 and the Cuban Revolution in the late 1950s showed that the third world countries could skip the stage of bourgeois revolution. Attracted to the Chinese and the Cuban model of development, many radical Latin American researchers wondered whether their own countries could also move into the stage of socialist revolution” (So, The Dependency and World-Systems Perspectives).
Many of the issues that Global South states have had can be traced to the Post-WWII time period. It was then, in 1944, that international organizations such as the World Bank, the IMF, and the GATT (which is today the World Trade Organization), formed. these organizations were created to not only expand upon economic cooperation, but many critics have argued that they were economic tools by rich countries, to promote capitalism and neo-liberal economic principles in the international system. However, in the early decades after World War II, the same Global North states that were advocating neoliberalism were at times themselves establishing protectionist policies for their own economic sectors. As Baylis, Smith, & Owens (2011) write: “An egregious example of the new protectionism was the Multifiber Arrangement of 1973, which placed restrictions on the textile and apparel imports from developing countries, blatantly violating the GATT principle of non-discriination” (250).
Thus, many Global South states, in the decades after the formation of these international organizations, spoke out many of the policies through these entities. For example, it was in the 1970s that Global South states spoke out at the United Nations General Assembly on a “New International Economic Order” (Baylis, Smith, & Owens, 2011), challenging the existing economic model, that they viewed as continued to not only keep Global South states reliant on the North (the argument of dependency theory), but also that the Global North was operating according to rules that they saw would help them, even if it was at the expense of the Global South economies.
Theoretically, the theory was well-received in the Global North by activists and those marginalized in society, for they saw the problems of U.S. domestic and foreign policy, whether towards minority groups domestically, or due to their political, economic, and military policies (Alvin Y. So).
World Systems Theory
One other type of dependency theory that arose in the field of international relations was world-systems theory. World System theory is within the dependency theory school, but differs on some issues.
Discussions about Dependency Theory
There continue to be many discussions centered on dependency theory of development and its applicability to helping understanding issues in international relations. For example, as scholars point out, much of the discourse is not so much around whether there is any truth to the idea that Global South states are affected by economic actions of the Global North. But rather, a number of the discussions seem to focus more on “the manner in and the degree to which an analysis of imperialism can account for the chief features of such basis aspects of development as the character of capital formation and the sectoral form industrialization takes in the Third World, the pattern of income distribution there, or the advent of military regimes in so much of Africa, Asia, and Latin America” (Smith, 1981: 756).
Critics of dependency theory argue that there is too much emphasis on economic imperialism to explain domestic and international relations in the world today. Similarly, they argue that at the expense of these international economic forces, what dependency theory scholars are failing to do is offer more insight, analysis, and weight to the idea of domestic (and international) politics as an explanatory factor for conditions within a state (or states) today. Those who take issue with systems theory often argue that the world his highly complex, and to merely suggest that the world issues can be explained the by international economic relationships between the Global North and Global South is inaccurate. So, other factors that may deserve mention are: local political and economic rivalries and contestations for power, the role of domestic corruption and nepotism, as well as other factors (and decisions) that may have led to an inability to develop economically at rates expected (or rates that leaders or others in society may have been hoping for). In addition, even if international states have interests and are involved in the politics of the Global South, to suggest that they are merely economic, and not political in nature, may be missing a large part of the explanation of current domestic and international affairs; one must look at how international power matters, and how Global North (and other states) are concerned with these notions of power and politics (as this is a very important driving force), and not merely economic interests (Smith, 1981).
As ___ writes on the issue of Latin America, “Obviously, Latin American societies have been built as a consequence of the expansion of European and American capitalism. Although less obvious, there are also features of capitalism common to developed and dependent countries. However, by excluding from the explanatory model social struggles and particular relations (economic, social, and political), that give momentum to specific dominated societies, these kinds of interpretation oversimplify history and lead to error: they do not offer accurate characterizations of societal structures, nor do they grasp the dynamic aspect of history actualized by social struggles in dependent societies” (Cardoso & Faletto, 1979: xv). Cardoso & Faletto give an example of the issues of merely looking at economic dependency theory without also examining non-economic international factors to better understand economic development in countries when they compare different countries in Latin America. They say: “…the expansion of capitalism in Bolivia and Venezuela, in Mexico or Peru, in Brazil and Argentina, in spite of having been submitted to the same global dynamic of international capitalism, didm not have the same history or consequences. The differences are rooted not only in the diversity of natural resources, nor just in the different periods in which these economies have been incorporated into the international system (although these factors have played some role). Their explanation must also lie in the different moments at which sectors of local classes allied or clashed with foreign interests, organized different forms of state, sustained distinct ideologies, or tried to implement various policies or defined alternative strategies to cope with imperialist challenges in diverse moments in history” (xvii).
Baylis, J., Smith, S., & Owens, P. (2011). The Globalization of World Politics: An Introduction to International Relations. Oxford, England. Oxford University Press.
Cardoso, F.H. & Faletto, E (1979). Dependency and Development in Latin America. Translated by Marjory Mattingly Urquidi. Berkeley, California. California University Press. Available Online: http://isites.harvard.edu/fs/docs/icb.topic925740.files/Week%202/Cardoso_Dependency.pdf
Dos Santos, T. (1971).”The Structure of Dependence,” in K.T. Frann and Donald C. Hodges, eds., Readings in U.S. Imperialism. Boston: Porter Sargent, 1971, p. 226.
Ferraro, V. (1996). The Dependency Perspective. July 1996. Available Online: http://marriottschool.net/emp/WPW/pdf/class/Class_6-The_Dependency_Perspective.pdf
Smith, T. (1981). The Logic of Dependency Theory Revisited, International Organization, Vol. 35, No. 4 (Autumn 1981), pages 755-761.
Sunkel, O. (1969). National Development Policy and External Dependence in Latin America, The Journal of Development Studies, Vol. 6, No. 1, October 1969, p.23.