The Central Propositions of Dependency Theory

There are a number of propositions, all of which are contestable, which form the core

of dependency theory. These propositions include:

1. Underdevelopment is a condition fundamentally different from undevelopment.

The latter term simply refers to a condition in which resources are not being used. For

example, the European colonists viewed the North American continent as an

undeveloped area: the land was not actively cultivated on a scale consistent with its

potential. Underdevelopment refers to a situation in which resources are being

actively used, but used in a way which benefits dominant states and not the poorer

states in which the resources are found.

2. The distinction between underdevelopment and undevelopment places

the poorer countries of the world is a profoundly different historical

context. These countries are not "behind" or "catching up" to the richer

countries of the world. They are not poor because they lagged behind the

scientific transformations or the Enlightenment values of the European

states. They are poor because they were coercively integrated into the

European economic system only as producers of raw materials or to serve

as repositories of cheap labor, and were denied the opportunity to market

their resources in any way that competed with dominant states.

3. Dependency theory suggests that alternative uses of resources are

preferable to the resource usage patterns imposed by dominant states. There

criteria are invoked. For example, one of the dominant state practices most

often criticized by dependency theorists is export agriculture. The criticism

is that many poor economies experience rather high rates of malnutrition

even though they produce great amounts of food for export. Many

dependency theorists would argue that those agricultural lands should be

used for domestic food production in order to reduce the rates of

malnutrition.

4. The preceding proposition can be amplified: dependency theorists rely

upon a belief that there exists a clear "national" economic interest which

can and should be articulated for each country. In this respect, dependency

theory actually shares a similar theoretical concern with realism. What

distinguishes the dependency perspective is that its proponents believe that

this national interest can only be satisfied by addressing the needs of the

poor within a society, rather than through the satisfaction of corporate or

governmental needs. Trying to determine what is "best" for the poor is a

difficult analytical problem over the long run. Dependency theorists have

not yet articulated an operational definition of the national economic

interest.

5. The diversion of resources over time (and one must remember that

dependent relationships have persisted since the European expansion

beginning in the fifteenth century) is maintained not only by the power of

states. Dependency theorists argue that these elites maintain a dependent

relationship because their own private interests coincide with the interests

of the dominant states. These elites are typically trained in the dominant

states and share similar values and culture with the elites in dominant

states. Thus, in a very real sense, a dependency relationship is a "voluntary"

relationship. One need not argue that the elites in a dependent state are

consciously betraying the interests of their poor; the elites sincerely believe

that the key to economic development lies in following the prescriptions of

liberal economic doctrine.

The Policy Implications of Dependency Analysis

If one accepts the analysis of dependency theory, then the questions of how poor

economies develop become quite different from the traditional questions concerning

comparative advantage, capital accumulation, and import/export strategies. Some of

the most important new issues include:

1. The success of the advanced industrial economies does not serve as a model for the

currently developing economies. When economic development became a focused

area of study, the analytical strategy (and ideological preference) was quite clear: all

nations need to emulate the patterns used by the rich countries. Indeed, in the 1950s

and 1960s there was a paradigmatic consensus that growth strategies were universally

applicable, a consensus best articulated by Walt Rostow in his book, The Stages of

Economic Growth. Dependency theory suggests that the success of the richer
countries was a highly contingent and specific episode in global economic history,

one dominated by the highly exploitative colonial relationships of the European

powers. A repeat of those relationships is not now highly likely for the poor countries

of the world.

2. Dependency theory repudiates the central distributive mechanism of the

neoclassical model, what is usually called "trickle-down" economics. The

neoclassical model of economic growth pays relatively little attention to the

question of distribution of wealth. Its primary concern is on efficient

production and assumes that the market will allocate the rewards of

efficient production in a rational and unbiased manner. This assumption

may be valid for a well-integrated, economically fluid economy where

people can quickly adjust to economic changes and where consumption

patterns are not distorted by non-economic forces such as racial, ethnic, or

gender bias. These conditions are not pervasive in the developing

economies, and dependency theorists argue that economic activity is not

easily disseminated in poor economies. For these structural reasons,

dependency theorists argue that the market alone is not a sufficient

distributive mechanism.

3. Since the market only rewards productivity, dependency theorists

discount aggregate measures of economic growth such as the GDP or trade

indices. Dependency theorists do not deny that economic activity occurs

within a dependent state. They do make a very important distinction,

example, there is a greater concern within the dependency framework for

whether the economic activity is actually benefitting the nation as a whole.

Therefore, far greater attention is paid to indices such as life expectancy,

literacy, infant mortality, education, and the like. Dependency theorists

clearly emphasize social indicators far more than economic indicators.

4. Dependent states, therefore, should attempt to pursue policies of self-

reliance. Contrary to the neo-classical models endorsed by the International

Monetary Fund and the World Bank, greater integration into the global

economy is not necessarily a good choice for poor countries. Often this

policy perspective is viewed as an endorsement of a policy of autarky, and

there have been some experiments with such a policy such as China's Great

Leap Forward or Tanzania's policy of Ujamaa. The failures of these

policies are clear, and the failures suggest that autarky is not a good choice.

Rather a policy of self-reliance should be interpreted as endorsing a policy

of controlled interactions with the world economy: ppor countries should

only endorse interactions on terms that promise to improve the social and

economic welfare of the larger citizenry.