Dependency theory Flashcards
what are the core arguments of dependency theory?
- criticism of modernization theory
1. underdev = result of integration into world markets dominated by advanced nations (external factors)
2. capitalism -> inequalities and social conflict
3. hierarchy in world economic system = dependent relations and unequal exchange
what are the roots of dependency theory?
- structuralist school of UNECLA (Prebisch/Singer Thesis)
- marxism
what is the Prebisch-Singer thesis?
- UNECLA structuralist school
- latin america not benefitting from trade due to unfavourable terms of trade
- > exporting low value primary products and importing high value industrial/consumption products
- long-run: decline in terms of trade: exports cheaper and imports more expensive
According to the Prebisch-Singer thesis, what are the origins of unfavourable terms of trade?
colonialism
- integrated colonies into the world market in particular way that they export cheap good and import expensive goods -> distorted (externally-oriented) economy
- remain economically dependent
what is classical marxism?
- traditional/agrarian society -> feudalism -> capitalism -> revolution -> communism
- process -> conflict (winners and losers) (capital owners vs workers)
what did dependency take from marxism?
- capitalism -> progress by developing relations of production and destroying traditional society
- level of analysis: economic systems
what is the later marxist view?
applies classical marxism to imperialism
- capitalism -> int division of labour -> distorted economy
- uneven development
- backwardness: result from integration in world markets
- imitation to catch up = impossible
- unit of analysis: world capitalist system
- local bourgeoisie = advance country elites (comprador bourgeoisie)
What is the Gunder Frank Dichotomy?
metropoles (core) vs. satellites (periphery)
- from LA + Mexico studies
- cause of underdev: extraction of surplus from satellites by metropoles
- backwardness: result of capitalism (external trade relations)
- autonomous dev = impossible -> so better so sever linkages
- crude theory (no autonomy for politics)
What does Cardoso and Falleto + Evans argue?
- internal class structures (coallitions) are linked to external structures
- politics (coallitions) influence outcomes (role of the state)
- possibility of limited dependent development
- > by allying domestic and international capital
- Evans’ 3 way alliance: domestic capital + foreign capital + state
what does O’Donnell argue are the political consequences of dependence?
- economically limited : exclude popular interests and lower classes
- rise of bureaucratic authoritarianism (exclusionary)
(no democracy)
what is world systems theory
unit of analysis: world system
Wallerstein
core + semi-periphery + periphery
semi periphery = limited development
what do dependency and world systems theory share?
- structuralist
- analyse capitalist dev
- level: world system
- unequal exchange
what are the strengths of dependency theory?
- corrects 1-sided approach of modernization (also external factors)
- consistent historical analysis based on historical materialism
what are the weaknesses of dependency theory?
- state focus (methodological territorialism)
- implicit assumption: if linkages with west are broken -> some dev possible
- underestimate importance of internal and political factors (role of agency)
what are examples of dependency theory in practice? (policies)
NIEO (external)
ISI (internal)
de-linkage
What is the New International Economic Order (NIEO)?
- proposals to promote growth and dev from 1970s (external reforms)
- by Third World
- attempt to reform world markets for raw materials (commodities)
(a) stabilization funds
(b) reserve stocks (for supply shocks)
(c) cartels: formation of OPEC (oil)
what was the result of NIEO?
- limited success
- still fluctuating prices and little access to western markets
what policies linked to dependency theory were taken in Latin America?
ISI
what were ISIs in Latin America composed of?
- cutting ties with advanced countries
(a) produce formerly imported consumer goods
(b) protection of infant industries by tariff walls (cheap imports by overvalued XR)
(c) control by comprador bourgeoisie
what was the effect of ISIs in Latin America?
- insufficient profitability (small market)
- dependent on importing tech still
- financed by exports which were suffering from overvalued XR)
- still dependent on primary sector
- result: still structural deficit (BoP) today
politically: rising local bourgeoisie + multinational capital alliance ; instability and exclusionary
what policies were taken in Africa according to dependency theory?
limited ISI
what were ISIs in Africa composed of?
- protection and overvalued XR
(a) state interventions
(b) state monopolies
(c) crop taxation
(d) low food prices
what was the effect of ISIs in Africa?
1970s: African Agrarian Crisis
- low productivity
- dependence on food imports and food aid (low prices)
- urban bias of dev
- structurally high BoP deficits
emergence of bad policies persepctive
what is the ‘bad policies perspective’?
from African ISIs
- urban bias in policies
- excessive state intervention (discredit statist model)
- bloated bureaucracies and corruption rise
led to rise in neo-liberalism
what policies were implemented in asia in accordance with dependency theory?
radical de-linkage and autarky (china - mao, burma, Cambodia, north korea)
(autarky = economic independence or self-sufficiency)
how can the asian tigers/ asian miracle be explained?
political constellation favourable to econ growth: committed elite, need to catch up perception, capable bureaucracy
- private and state partnership
- export-oriented industrialization (EOI)
- disciplined and large labour force
- favourable culture of confuscianism
- investment in human dev, some redistribution
- timing and niche of int market
how is the asian tiger success interpreted according to modernization theory?
important role of internal factors
- effective use of comparative adv
- large, well-educated labour force
- limited democratic dev
how is the asian tiger success interpreted according to dependency theory?
- economic growth but still dependent on tech and capital of west -> only ‘semi-periphery’ status
- exploited labour force, political authoritarianism
what is the global divergence
in the 1980s: some developing countries experienced high growth while others declining growth
growth: China + SEA
declining growth: Africa, LA, Carribean
