Module Detail

Subject Name Political Science

Paper Name International Relations Theory and Politics

Module Name/Title Dependency Theory

Pre-requisites

 Significance of dependency theory in International

Objectives Politics

 Understanding of Dependency theory in

comparative analysis of developing countries in
Asia, Africa and Latin America

 Assessment of the contributions of dependency

theory in the field of IR

 Critical assessment of dependency theory in

context of IR

• Dependency
Keywords
• Dependere

• New Dependency

• Dependencia

• Economic Commission of Latin America (ECLA)

• Core

• Periphery

• Peripheral Capitalism

• Poles of Development

• Growth Pole

Structure of Module / Syllabus of a module (Define Topic / Sub-topic of module)

Role Name Affiliation

Principal Investigator Prof. Ashutosh Kumar Professor

Department of
Political Science
Panjab University
Chandigarh.

Prof. Shibashis Chatterjee

Paper Coordinator Department of
International
Relations, Jadavpur
University, Kolkata.

School of
International Studiess,
Dr. Jayati Srivastava JNU, New Delhi

Content Writer/Author (CW) Prof. Gautam Kumar Basu Department of

International
Relations, Jadavpur
University, Kolkata.

Content Reviewer (CR) Late Prof. Sekhar Ghosh Ex-Professor of the

Dept. of Political
Science, Burdwan
University, West
Bengal.

Prof. Shibashis Chatterjee

Language Editor (LE) Department of
International
Relations, Jadavpur
University, Kolkata.
 Dependency Theory

Gautam Kumar Basu

Department of International Relations,
Jadavpur University, Kolkata – 700032.
Dependency theory is popularly used in comparative analysis of developing countries in
Asia, Africa and Latin America. Although its origin can be traced back immediately after the
end of the World War II, the theory becomes very popular in Latin America during the 1960s
and later finds huge support among several scholars in Asia and Africa. Both radical and
liberal scholars have assimilated dependency theory into their interpretations of development
and underdevelopment, with considerable challenges and counterchallenges to one another.
The result is utter confusion and intellectual chaos.

Origin of the Term Dependency:

The origin of the term ‘dependency’ can be traced back to the conjuncture of two sources: the
Latin dependere – and/or the old French dependre – and the Latin suffix entia. Besides, this
term has to be distinguished from ‘dependence’. ‘Dependence’ originally refers to a state
which originally owes its allegiance directly to a dominant sovereign power. It implies
external reliance of any state on another powerful state either politically or economically.
Dependency, on the other hand, proceeds from a very different perspective – it focuses on
economic class structure, international capital and the role of the state in managing and
shaping local, foreign and class forces that propels development or underdevelopment within
a specific country. In this sense, as Raymond Duvall (1978) argues, dependency may be
defined as a process of integration of the peripheral countries into the international capitalist
system and generation of structural distortions in those societies. In fact, dependency theorists
tend to emphasise development or underdevelopment of developing countries as reflection of
expansion of developed capitalist countries. Dos Santos (1970), a Brazilian economist, has
offered a brilliant definition of dependency. To him it is a ‘situation’ in which economies of
certain countries are ‘conditioned by the development and expansion’ of other economies to
which the former economies are subjected. To him, ‘the relation of inter-dependence between
two or more economies, and between these and world trade, assumes the form of dependence
when some countries (the dominant ones) can do this only as a reflection of that expansion,
which can have either a positive or negative effect on their immediate development’. In fact,
foreign penetration and its effects on political, financial economic as well as technical and
cultural life of a developing country appear to be intrinsic to in dependency situation. As
Osvaldo Sunkel (1972) has argued that dependencia tends to produce a situation where
access to the means and benefits of development becomes selective; and, secondly, it tends to
‘ensure a self-reinforcing accumulation of privilege for special groups as well as the
continued existence of a marginal class’. Thus, broadly speaking, one can identify the
following features of dependency: First, dependency is a historic phenomenon closely linked
with the origin of capitalism and the emergence of international division of labour. Secondly,
dependency is a syndrome of related characteristics of a transnational alliance between local
and foreign capital and technology, restricted developmental choices and domestic distortions
that are caused by the incorporation of peripheral countries into the orbit of international
capitalist system.

Typology of Dependency Theory:

It is difficult either to identify a typology of dependency theory or to recognize a common

approach towards dependency. Ronald Chilcote (1981) has identified four different types.
To him, if Cardoso has identified three different tendencies in the vast literature on
dependency, C.S. Bacha finds not less than five different versions. Similarly, if Philip
O’Brien describes three different versions of this theory, Chilcote himself has described four
types of dependencia. Cardoso describes three different types: First, Heilo Jaguaribe argues
that underdeveloped nations confront three alternatives – dependency, autonomy and
revolution. Based mainly on analysis of Brazilian situation, he argues that dependency can be
overcome through autonomy and incremental changes rather than relying on the export of
commodities and foreign investment. A second tendency, championed by Baran and Sweezy
(1966), describes dependency as a reflection of expansion of monopoly capitalism on a world
scale. The third tendency can be seen in Cardoso’s own writings -- to him, capitalist
development in developing countries can be explained through evolution of class relations in
such societies and through interaction of international politics and economics. Bacha
identifies five different trends: First, following Tomas Vasconi (1969), he argues that
development and underdevelopment can be studied by looking into the interdependent
relations between centre and periphery. Secondly, he identifies Lenin’ theory of imperialism
as viable explanation of dependencia as this tends to establish linkages between internal and
external forces of an underdeveloped nation. The third, fourth and fifth versions reflect
Frank’s thesis on ‘development of underdevelopment’, Dos Santos’ notion of ‘new
dependency’ and Cardoso’s description of ‘dependent development, respectively. O’Brien
identifies three different trends – it includes model developed by Economic Commission of
Latin America (ECLA) in the 1950s, Marxist model, as developed by Frank, and Marxist
structuralist model, as described by Cardoso. Finally, Chilcote identifies four major
tendencies in dependencia literature: ‘development of underdevelopment’ thesis, as
propounded by Frank, ‘dependent development’ thesis, as formulated by Cardoso, ‘New
Dependency’ thesis, as elaborated by Dos Santos and linkages between imperialism and
dependency, as described by Baran and Sweezy. A look at this typology of literature on
dependency theory compels us to argue that broadly speaking understanding of dependencia
may follow two different approaches: non-Marxist and Marxist. The former has been
reflected in the writings of ECLA school of thought, which includes scholars like Raul
Prebish, Osvaldo Sunkel, Celso Furtado, internal colonial school of Casanova and poles of
development approach of Andrade. The Marxist tradition has been adopted by scholars like
Frank, Marini, who develops the theory of sub-imperialism, Cardoso as well as Dos Santos.

Perspectives of Economic Commission of Latin America (ECLA):

If Marxist influence in dependencia literature can be traced back to Lenin’s theory of

imperialism, non-Marxist tradition owes its origin to the establishment of Economic
Commission for Latin America (ECLA) under the auspices of the United Nations in the early
1950s. It has been argued that historically speaking, Latin America continues to depend on
exports of agricultural products and raw material for its internal development. However, the
economic depression, which engulfed almost the whole of Europe during 1930s, resulted in
the decline of export earnings of Latin American countries. The result was devastating for its
overall development. As far back as 1937, Raul Prebish (1901 – 1986) argued that
“manufacturing industries, and therefore industrial nations, can efficaciously control
production, thereby maintain the value of their products at desired levels. This is not the case
with agricultural and livestock countries” (cited in Chilcote [1984] p.24). In fact, in his
analysis of terms of trade in Latin America, he argues that from the late nineteenth century
through the end of World War II, prices have favoured exporters of industrial products in
industrial products over exporters of agricultural products as well as raw materials in
underdeveloped countries. It is, in this context, Prebisch introduced the terms ‘core’ and
‘periphery’, probably for the first time in 1944 – while the ‘core’ refers to developed
countries, and the ‘periphery’ refers to developing countries. The ECLA School was very
much critical of unfavourable terms of trade for developing countries and international
division of labour that such term of trade had created. It was recommended that developing
countries should pursue a policy of import substitution industrialization to get rid of such
disparities. Prebish has identified the following features of dependencia: First, developing
countries are characterized by dualist features where both capitalist and pre-capitalist social
systems exist side by side. Secondly, he uses the term ‘peripheral capitalism’ to distinguish it
from western capitalism. To him, peripheral capitalism arises ‘from irradiation by the
technologies of the industrial centres, and consisting of forms of consumption, institutions,
ideas, and ideologies characteristics of a purely imitative capitalism’. However, reproduction
of western capitalism seems impossible ‘due to the contradictions which these phenomena of
propagation and irradiation bring about in the social structure of the periphery’. Thirdly,
Prebisch appears to be sceptic about the probable role of capital accumulation and western
technologies in transforming a developing country as he states that ‘the process of capital
accumulation and the introduction of new technologies from industrial centres are not
motivated by the purpose of progressively incorporating new social strata into the
development processes’. Finally, what is significant about Prebisch is that he offers a
comprehensive definition of dependency. To him dependency refers to “the relations between
centres and the periphery whereby a country is subjected to decisions taken in the centres, not
only in economic matters, but also in matters of politics and strategy for domestic and foreign
policies. The consequence is that due to exterior pressure the country cannot decide
autonomously what it should do or cease doing. The structural changes bring about an
awareness of this phenomenon, and this awareness, the desire for autonomy, is one of the
integral elements in a critical understanding of the system”.

Osvaldo Sunkel, a Chilean economist, has argued that development and underdevelopment
reflect two different faces of the same universal process of capitalist development.
Dependency has two different features: on the one hand, it generates a division between
industrial, advanced, developed and metropolitan countries, and a world characterized by
underdeveloped, backward, poor, peripheral and dependent countries; on the other hand, the
same process produces a differentiation as well as polarization within an underdeveloped
country in terms of ‘space, backward, primitive, marginal and dependent groups and
activities’. It implies that a nation-state is just a sub-system of the international system. Based
on his analysis major centres of power – such as, Europe, Japan and the United States – and
penetration of multinational corporations in Latin America, he argues that such penetration
has either destroyed local capital or has co-opted them in their own fold. The result is that
Latin American countries have lost their capacities to develop in an autonomous and
independent fashion. Celso Furtado (1920 – 2004), a Brazilian economist, has almost
followed the same line of arguments. In his book The Economic Growth of Brazil (1963) ,
Furtado argues that underdevelopment has been caused by the “penetration of modern
capitalist enterprises into archaic structures”. To him European expansionism in the
eighteenth century and subsequently produced a ‘hybrid structure’ consisting of both
capitalist and pre-capitalist formations in developing countries through three different means:
disorganization of the pre-capitalist relations, displacement of borders wherever there was
unoccupied land and expansion and penetration into inhabited regions. Furtado describes the
social structure of underdeveloped countries in terms of economic bases of different social
groups. The ruling class consists of the following: original landowners, connected with
foreign trade, support free trade and oppose state interventions; a group of capitalists, who
support foreign trade but are dependent on the state for free trade; and, a group of capitalists
who favour protectionist policies of the state and do not hesitate to manipulate state
machineries for their own interests. Needless to say, these ruling groups are antagonistic to
one another and are hardly in a position to formulate a coherent development strategy for the
country as a whole. Below this ruling group, one can see salaried urban masses, engaged
mainly in services, an industrial working class and at the bottom a class of peasantry. To
Furtado, such class structure, combined with consumer oriented import substitution
industrialization policies, produces what he describes as ‘peripheral capitalism’. But such
peripheral capitalism depends, to a large extent, on outsiders for transformation of local
economy – and, this is what he defines as ‘external dependence’.

Internal Colonialism:

Gonzalez Casanova, who mainly studied politico-economic development of Mexico and

adopted an eclectic methodology, was happy that the Mexican state was effective in
controlling external pressures, negotiating with large conglomerates and promoting national
development. He, however, identified a different trend in the developmental processes of
Mexico. To him, Mexican countryside had been reflecting the major outcomes as well as
conditions of traditional colonialism. He discovered two different Mexico: on the one hand,
one can see a Mexico, consisting mainly of Indians, which was characterized by domination,
exploitation and marginalization; on the other hand, one can come across a Mexico,
comprising of Spanish, Creoles and Ladinos, which tends to dominate and exploit the
marginal society. He describes this scenario as an example of internal colonialism which
actually typifies ‘colonialism as an integral phenomenon, changeable from an international to
an internal category’ (cited in Chilcote: 1984:p.38). To him, almost all new nations which
have reached the take-off stage tend to ‘preserve, above all, the dichotomous character and
contradictory types of relations similar to those found in colonial society’ (ibid.). He
identifies two types of internal colonialism: first, it may take the form of domination by a
dominant centre or metropolis – it will have control over commerce and credit, and thereby
compel the marginal people to rely on monoculture, deformation and dependence of
peripheral economies on the metropolis. Secondly, exploitation may be a combination of
feudalism, slavery, capitalist forces and urban salaried people. The result is: a newly
independent society continues to be characterized by dualist feature, domination,
exploitation, marginalization, inequality and uneven development. Almost a similar argument
can be found in the writings of another Brazilian geographer and economist, Manuel Correia
de Andrade. Following the French economist Francois Perroux (1903 – 1987), he
introduces the concept of poles of development in dependencia literature. Perroux defines
poles of development as areas of entrepreneurial activities. These areas act ‘motor units’ and
are closely linked with other regions of a country. To him, such poles of development should
be interlinked with areas engaged in producing raw materials. Once such linkages are
established, development will automatically take place. He distinguishes two different types
of poles: first is the growth pole – this pole is a ‘set that has the capacity to induce growth of
another set’; the second one is called the development pole which has ‘the capacity to
endanger a dialectic of economic and social structures whose effect is to increase the
complexity of the whole and to expand its multidimensional return’ (cited in Aguiar Serra:
2003: p.9). Andrade identifies several poles of development in Brazil. But unfortunately, he
argues, either development does not take place or if it takes place, it assumes a dependent
character. In other words, in the Brazilian context, poles of development have produced an
unequal and uneven development. He is, however, optimistic in the sense that such poles of
development can act as agents of transformation provided such poles will be integrated into
one national scheme, controlled by exclusive national control, and a balance should between
national and international investments. The general finding, however, is that ‘these strategies
were unable to improve social and economic well-being of populations who live in peripheral
regions and who belong, to a large extent, to the poorest social structure of society’ (Aguiar
Serra: 2003: p.17).

‘Development of Underdevelopment’:
Andre Gunder Frank (1929 – 2005), however, appears to be the most vocal, and probably
the most controversial, spokesman for dependency theory. In one of his articles, published in
1966, he tries to look into ‘the economic and other relations between the metropolis and its
economic colonies throughout the history of worldwide expansion and development of the
mercantilist and capitalist system’ (p. 27). To him, capitalist development in the metropolis
has produced under development in satellite countries of the world. By metropolis, he refers
to the developed countries of the west, and by satellite countries he tends to describe the
under developed countries of the world. In the same article, he argues that underdevelopment
should be viewed as ‘the historical product of the past and continuing economic and other
relations between satellite underdeveloped and now developed metropolitan countries’ (p.28).
To him, underdevelopment is not something that existed in the past – in fact, it ‘was still and
still is generated by the very same historical process which also generated economic
development’ (p.31). In his book on Capitalism and Underdevelopment in Latin America
(1967), he develops six major hypotheses regarding development of underdevelopment. First,
in the contemporary world, there exists a relationship between metropolises and satellite
countries that shows that metropoles tend to develop continuously while satellites tend to
remain underdeveloped. The world metropolis appears to be all-embracing and is not the
satellite of any entity. However, development of national and other subordinate metropolises
is limited by their subordinate status to the world metropolises. One can illustrate this
relationship by looking into the conditions of cities like Buenos Aires (Argentina) and Sao
Paulo (Brazil). Both these cities began to flourish in the nineteenth century but continue to
remain dependent on the outside metropolises of Great Britain and the United States.
Secondly, historical developments of capitalism on an international level have generated
underdevelopment in satellite countries through expropriation of economic surplus of the
latter by the former. In contrast to the dualist assumption of a differentiation between an
industrialised urban sector and a traditional and economically backward sector, Frank
visualises ‘a whole chain of metropolises and satellites, which runs from the world metropolis
down to the hacienda or rural merchants who are satellites of the local commercial
metropolitan centre but who in their turn have their peasants as satellites’. Thirdly, a satellite
tends to develop when its linkages with the metropolis is the weakest – however, once the
same metropolis starts recovering from its weak position, the satellite starts reabsorbing itself
with the world capitalist system and fails to reproduce itself. Frank exemplifies the following
historical situations: the European depression of the seventeenth century, the Napoleonic
wars, the First and Second World Wars along with the Great Depression of 1932 which
intervened between these two wars. Fourthly, areas that appear today as feudal and backward
may not have been either isolated or pre-capitalist in the past. In fact, those areas used to
provide huge amount of primary products and continued to be vast source of capital to the
world metropolis. Their subsequent decline can be attributed to their abandonment by the
metropolis. Fifthly, the latifundium, that is, the large landholding, was established as
commercial enterprise to fulfil the demands of both national and world markets. Finally, it is
true that some latifundia may look backward and feudal-like – such look is not the
consequence of their isolation from the world metropolis, but may be attributed to the decline
of agricultural and mining areas abandoned by the metropolis.

Frank has made an all-out effort to substantiate his hypotheses from an in-depth analysis of
historical development of both Chile and Brazil. In case of Chile, he argues that during the
seventeenth century Chile remained ‘more isolated or more weakly integrated into the world
capitalist metropolis-satellite structure than other Spanish colonies’. During the eighteenth
century, it continued to be essentially an export oriented country, and its efforts towards
national development remained unfulfilled and ‘condemned its people to continued
development of underdevelopment’. No changes could be identified in its fate during the
twentieth century because of its dependence on the United States and it continued to be ‘part
and parcel of the capitalist system’ and an ‘instrument of the bourgeoisie’. The same was true
of Brazil – on the one hand, ‘the satellite livestock economy formed a metropolis with respect
to the Indian zones into which its expansion forced the Indians to withdraw. This reflects the
fact that the ‘European metropolis thus affected the life of the interior through a long chain of
metropolises and satellites’. On the other hand, he also tries to show conflict between
Portugal and Britain in the eighteenth century resulted in transforming Portugal into an
intermediary between Great Britain and Brazil while ‘Great Britain took over the economic
monopoly and spoils’. This is significant in the sense that it shows how one part of the system
may exploit other parts and thereby produces regional differences. Frank argues in his
another work On Capitalist Development (1975): ‘Although there results a regional
concentration of development and underdevelopment, there also develop developed sectors in
underdeveloped regions and underdeveloped sectors in developed regions as the products of
the same process of uneven capitalist development.’ Whatever the situation is, the trend
continues to be the same as far as the issue of development of underdevelopment is
concerned as he states in a different context: ‘the closer the economic and political relations
between the metropolis and its colonial satellite, the Latin American bourgeoisie, the more
the economic and political policies of the latter intensify the development of
underdevelopment’ (Frank: 2004:p.102). Such bourgeoisie, whom he describes as ‘lumpen
bourgeoisie’, cannot go beyond ‘a neopolicy of lumpendevelopment’ because ‘of its own
vested interest’. Such a policy ‘will undoubtedly deepen still further the economic, social, and
political contradiction – in short, the lumpendevelopment of Latin America’ (ibid: p.115).

Here, it may be noted that based on Frank’s notion of development of developed sectors in
underdeveloped regions and underdeveloped sectors in developed regions, Ruy Mauro
Marini (1969) has tried to develop a theory of ‘sub imperialism’. In the context of military
rule in Brazil, Marini characterizes Brazilian capitalism as ‘super exploitative’. On the one
hand, capital accumulation benefits the owners of means of production, and, on the other,
masses continue to live in abject poverty. Chilcote (1981: pp. 305 – 306) sums up this theory
thus: “With the diminution of the internal consumer market and a related decline in surplus,
the Brazilian economy reached an impasse in 1964. At that time the military regime initiated
its sub imperialist scheme on two fronts: first, to further exploit mass consumption and,
second, to penetrate foreign markets. Compromised by the interests of the multinationals and
the exploitation of the proletariat, Brazilian expansion depended on the ability of the
bourgeoisie to compete in foreign markets”. In fact, Frank has also identified this tendency
towards sub imperialism on the part of certain other developing countries, such as India, Iran
and Israel.

Dependent development:

F.H. Cardoso (1931 -- ) and Enzo Faletto 1935 – 2003) in their book Dependency and
Development in Latin America (1979) have tried to free dependency theory from such
mechanistic understanding of dependency from the ‘logic of capitalistic accumulation’. They
do not deny the fact that development of Latin American societies has been closely linked
with the expansion of European and American capitalism. But, to them, the relationship
between external and internal forces tend to form ‘a complex whole whose structural links are
not based on mere external forms of exploitation and coercion, but are rooted in coincidences
of interests between local dominant classes and international ones, and, on the other side, are
challenged by local dominated groups and classes’. Given this theoretical assumption, they
tend to argue that dynamics of dependency can be studied by emphasizing ‘not just the
structural conditioning of social life, but also historical transformations of structures by
conflict, social movements, and class struggles’. Rather than developing a theory of
dependency, they have tried to identify ‘situations of dependency’ prior to the emergence of
international capitalism based on the dynamism of multinational capitalism. Two different
types of dependency have been identified. The first one has been described as enclave
economies. In this type of economy, ‘foreign invested capital originates in the exterior, is
incorporated into local productive processes, and transforms parts of itself into wages and
taxes. Its value is increased by the exploitation of local labour forces, which transform nature
and produce goods that realize again the life of this capital when staples are sold in the
external market’. The other type of dependency situation is characterised by domination of
economies by local bourgeoisie. In this type of economy capital accumulation takes place
through appropriation of natural resources by local entrepreneurs as well as exploitation of
labour forces by these groups. However, this local bourgeoisie is dependent on international
market for sale of products. In the concluding part of this book Cardoso and Faletto have
argued that the contemporary phase of dependency can be explained by looking into the
‘increasing control over the economic systems of nations by large multinational
corporations’. To them, dependency does not necessarily generate underdevelopment. But,
rather, it has tended to produce a kind of ‘dependent development’. In this context, it can be
stated that writing in the backdrop of Brazilian bureaucratic authoritarianism, Cardoso (1973)
has argued that the Brazilian military regime in the 1960s has maintained ‘increased
interdependence in production activities at the international level’ and industrial firms
continue to be dominated international capitalism. He describes it as ‘associated dependent
development’. Under this situation, two features emerge: on the one hand, ‘the interests of
foreign corporations become compatible with the internal prosperity of the dependent
countries’; and, on the other hand, development in peripheral countries ‘depends on
technological, financial, organizational, and market connections that only multinational
corporations can assure’. Both Cardoso and Faletto admit that capitalism is a world system
and the existence of a periphery is interlinked with ‘economic drive of advanced capitalist
economies’. The resultant dependent development tends to generate ‘wealth and poverty,
accumulation and shortage of capital, employment for some and unemployment for others’
both in the centre as well in the periphery. To them, dynamics of dependency can be studied
by emphasizing ‘the economic factors conditioning the world market; the structure of the
national production system and the kind of linkage it has developed with the external market;
the historical-structural shape of such societies, with their ways of assigning and maintaining
power; and above all, the political-social movements and processes that exert pressure
towards change, and their respective orientations and objectives’. It is true both Cardoso and
Faletto have argued that their main objective does not revolve around the issue of evolving
mechanisms for ‘autonomous capitalism’ in Latin American countries but to recommend
strategies for superseding them and constructing paths towards socialism. But unfortunately,
they could not prescribe such strategies.

Dependencia beyond Latin America:

It should be noted that though dependency theory has its origin in the writings of several
Latin American scholars, this theory has inspired many thinkers from both Africa and Asia to
follow the same logic and apply them to their own national context. One of the most
prominent thinkers in this field from Africa is Samir Amin (1931 --). His (2010: p.29) whole
argument has been expressed in this statement: ‘during the last four centuries of capitalist
expansion, the peripheries have been submitted to asymmetrical structural adjustments
according to the needs of accumulation governed by the dominant North. In the nineteenth
century, with the industrial revolution, these adjustments took the form of a contrast between
the industrialized centres and the peripheries forbidden to industrialize’. He is a prolific
writer – however, two of his major works which contain elaborate argument of dependency
theory are: a two volume work entitled Accumulation on a World Scale: A Critique of the
tTheory of Underdevelopment (1974) and Unequal Development: An Essay on the Social
Formations of Peripheral Capitalism (1976). Some of the major features of Samir Amin’s
argument may be summarized as follows: First, he distinguishes between two types of
dependencies in peripheral societies: external dependency and commercial dependency.
External dependency emphasises external trade where export of primary goods takes place
for imports of manufactured goods. Commercial dependency refers to an ever increasing
emphasis on investments of foreign capital which results in repatriation of profits, and
subsequent return of capital from peripheral countries to developed parts of the world. The
result is, as Amin states, ‘Whereas at the centre, growth is development -- that is, it has an
integrating effect – in the periphery growth is not development, for its effect is to
disarticulate. Strictly speaking, growth in the periphery, based on integration into the world
market, is development of underdevelopment’ (cited in Chilcote: 1984: p.101). Secondly,
social contradictions of capitalism should not be studied in terms of differentiation between
the bourgeoisie and proletariat of individual countries – rather, it should be studied in terms
of contradictions on a world scale. Such contradictions can be found not only in the capitalist
mode of production, but also in capitalist social formations. Thirdly, Amin makes a detailed
analysis of different social formations, such as American, Arab, Asian and African. To him,
all these social formations have been characterized by ‘predominance of agrarian capital in
the national sector, the generation of a local or merchant bourgeoisie in the path of dominant
foreign capital, and a tendency toward formation of a bureaucracy’ (ibid: p. 104). Fourthly, in
contrast to the prevailing notion of two different world markets, that is, capitalist and
socialist, on a world scale, he recognises only the capitalist world market and argues that
Eastern Europe marginally participates in such a system. Finally, he argues that the periphery
would have to surpass the capitalist model of development. A true development that is ‘not
merely development of underdevelopment will therefore be both national, popular-
democratic, and socialist, by virtue of the world project it forms part’ (cited in ibid.).

Walter Rodney (1942 – 1980), in his famous book How Europe Underdeveloped Africa
(1972), tends to offer almost the same logic. One can find following features in Rodney’s
arguments: First, he defines development in terms of individual’s capability to improve his
skills and capacities, achieve greater freedom and creativity, and ensure self-discipline, sense
of responsibility as well as material well being. Secondly, economic development of a given
society depends, to a large extent, on the increasing collective capabilities of individuals to
deal with the environment. Unfortunately, such collective effort towards development does
not necessarily produce equal benefits for all individuals. In other words, development
assumes an uneven character. Thirdly, to him, development takes place through various
forms of modes of production, and each phase of development gives to a new form of social
formation. Thus, imperialism reflects a phase of capitalist development and has resulted in
the expansion of capitalism to various parts of the world. Fourthly, underdevelopment is not
necessarily the absence of development, but is linked with the concept of uneven
development. Fifthly, Rodney prefers the word ‘underdevelopment’, rather than ‘developing’
because he thinks that the latter, at least implicitly, tends to acknowledge that several
backward countries of the Third World can get rid of their backward conditions and
exploitation. In fact, to him, many countries of Africa, Asia and Latin America are becoming
more underdeveloped in comparison with developed countries as exploitation by the latter
has become more intensified. Like Frank, Rodney also believes that contradictions within
capitalist world system will intensify struggles between exploiter and exploited classes and
the world will move towards socialism. Both these scholars, however, could not prescribe
strategies through which exploitation might come to an end (based on Chilcote: 1984: pp. 95
– 96).
Based on this analysis, one can argue that although dependencia can hardly be described as a
‘unified theory’, one can identify certain common features: First, this theory helps us to look
into the dynamics of development as well as underdevelopment of third world countries from
a new perspective. Secondly, dependency theory tends to emphasise analysis of class struggle
and strategies to promote such strategies on an international scale to resolve societal
contradictions and problems of developing countries. Finally, an understanding of the
dynamics of dependency syndromes and adoption of strategies for restructuring societies may
lead to restructuring of societies characterized by inequality, uneven development and
marginalization (see, Chilcote: 1980, pp.299 – 309).

Critique of Dependency Theory:

If dependency theory continues to be popular in the late-1960s, several scholars, both from
Marxist and non-Marxist standpoint, have started to offer criticisms of this theoretical
perspective. Bill Warren, for example, has argued that dependency thinkers have failed to
recognize the historically progressive nature as well as revolutionary dynamics of capitalism.
In fact, it has been argued that foreign capital not only generates employment in peripheral
countries, but also lays down foundations of development in such societies. Nigel Harris has
argued that dependency thinkers cannot understand and have not taken into consideration the
high level of development in newly industrialized countries. To him, these thinkers have
adopted a mechanistic interpretation of development. Besides, it has been argued that neither
do dependency thinkers take into consideration the fact debt repayments by developing
countries tend to transfer huge amount of resources from such countries, nor do they try to
examine the growth in poverty and inequality in developing countries as a whole. Again, it
has been argued that one can hardly see much difference between modernization and
dependency thinkers. In fact, both these groups tend to highlight growth – in fact, questions
have been raised regarding outcomes of development as visualized by the dependency
thinkers. Rist (cited in Slater: 2004: p.132 -- 134) has raised certain questions: since this
group of thinkers does not deny the necessity of growth, is it not their goal to ensure
modernization, industrialization and capture of foreign markets? Is there any guarantee that
the so-called anti-capitalist strategy, if any, they perceive, would not ultimately embrace the
same values, such as economic rationality, efficiency, utility and hard work, as projected by
supporters of capitalism? It has been argued that dependency thinkers have oversimplified
international economic relations arguing that a disproportionate emphasis has been given to
the idea that underdevelopment of third world countries is the direct consequence of the
development of advanced industrialized countries. In fact, Norman Long states that Frank has
given too much emphasis on vertical relationship between metropolitan and satellite countries
and thereby neglects the horizontal ties which sustain dependency structure (see, Basu:
1986). Again, it is true that some of the dependency thinkers tend to emphasise socialism as
an alternative for overcoming dependency ‘situations’. They, however, fail either to prescribe
alternative strategies for transition to socialism. In fact, Cardoso, despite his emphasis on
struggles and social movements, fails to emphasise role of the exploited classes. Frank also
considers ‘revolutionary destruction of bourgeois capitalism’ and its ‘replacement by socialist
development’ as the exclusive remedy against underdevelopment; he also does not
recommend strategies for transition to socialism. It has been argued by Giovanni Arrighi and
John Saul that Cardoso’s concept of internalization of the internal market with its correlate of
some kind of internal prosperity may prevent class struggle in future. John Taylor, who tries
to explain development of Latin America in terms of modes of production approach, argues
that dependency is a sociological fantasy while the concept of underdevelopment is both
economic and teleological. To him, social reality can be understood only by referring to
historical materialism as ‘a social formation which is dominated by an articulation of two
modes of production – a capitalist and a non-capitalist mode’, and ‘there can be no such thing
as linear succession from dominance by a capitalist mode of production. Imperialist
penetration, having as its object to create the preconditions for a transition to specific form of
capitalist production can produce’ what can be described as ‘the preconditions for the
possibility of a socialist mode of production’ (cited in Basu: 1986).

Conclusion:

It is true that dependency theory has often been described as irrelevant today by both liberal
and Marxist thinkers. Yet, David Slater (2004: chapter 5) has identified some of its features
which are still relevant. First, in contrast to modernization theory, dependency theorists tend
to adopt a much more critical view of the role of foreign capital as an agent of socio-
economic transformations of developing countries. In fact, it is difficult to ignore
dependentistas’ argument that incorporation of peripheral economies into integrated
international capitalism is detrimental to national development. Secondly, it has reinforced
the argument that ‘dependent capitalism’ tends to generate an urban process of
marginalization. Thirdly, dependency thinkers offer a serious challenge to traditional-modern
dichotomy, as envisaged by modernization thinkers. If Cardoso and Faletto have concentrated
on ‘historical specificities’ or ‘situations’ of dependency, several other thinkers, like
Stavenhagen, Quijano have argued that backward regions of developing countries have
continued to play the role of internal colonies vis-a-vis more developed and more urbanized
sectors of such countries. Thirdly, dependency theory challenges the whole assertion of
modernization theory that histories of developing countries are intimately connected with
western capitalist countries. In fact, several scholars from developing countries have
repeatedly emphasized the fact that non-western countries were considerably rich in cultural
and technological spheres prior to their integration into international capitalism. Finally, it
can hardly be denied that curtailment of organizational creativity, mobilization of natural
resources as well as emergence of ‘culture of violence’ are integrally linked with dominance
of international capitalism in most of the developing countries. In fact, as Dos Santos (1998)
has cogently argued that dependency theory is not only an ‘intellectual adventure’, but also
reveals a perspective that contemporary economic crises of developing countries may be
attributed to the fact that central countries continue to extract surpluses from dependent
economies. Besides, as Slater (2004: p.130) has argued: “...the struggles within the countries
of the Third World for international recognition, dignity and equality were a significant
driving force for much of literature that came under the broad heading of dependency”.

In conclusion, two different points may be raised: First, it is clear that dependency theory
makes an effort to look into the dynamics of development or underdevelopment in
developing countries in terms of external dependence, distortion of economies, and direct or
indirect political control on such societies by western advanced capitalist countries. However,
this theory had developed at a time Soviet Union continued to exist as a strong political and
economic unit in the international system. During this period the whole of Eastern Europe
had been dominated and controlled by the Soviet Union. It was, in this context, the question
had been raised regarding the possibility of extending the concept of ‘dependency’ to the
Soviet bloc. In other words, the question was: could one visualise or formulate the idea of
‘socialist dependency in the interrelationship between Soviet Union and Eastern Europe? Cal
Clarke and Donna Barry (1983) made an effort to identify “similarities and differences
between the capitalist and socialist versions of classic dependency and dependent
development” (Clarke and Bahry: 1983: p.276). To them, classic dependence had been
characterized by economic exploitation, political control over dependent society, existence of
elite which identified more with the ‘centre’ rather than its own society, and an economically
uneven development. During Stalinist era, “political control in those countries was
accompanied by economic control as a radical reorientation of East European trade from
West to East occurred, and the domestic economies of satellites were radically restructured
under Soviet direction” (ibid: p.277). However, Soviet domination over Eastern Europe
brought massive industrialization, extraction of resources by Soviet Union from these
countries, which was “approximately equal to US Marshall Plan to Western Europe” (ibid.),
and emergence of what Milovan Djilas described as ‘new class’. However, it was admitted
that the degree of economic inequality was much less than in most developing countries.
However, post-Stalinist phase in Soviet – East European relations generated a phase of
‘dependent development’ in two senses: first, economic development had been stimulated by
Soviet-imposed institutions, and, secondly, its progress had significantly increased the
economic dependence of these countries on Soviet Union. But there was a significant
difference. In fact, in terms of commodity trade between Soviet Union and East European
countries, the Soviet Union exchanged raw materials and fuels for East European
manufacturing products which, in turn, put Soviet Union in a disadvantageous position.
Besides, as the authors argued, “the Soviet bloc came out much better in terms of the impact
of the new dependency relationship upon external exploitation, the degree of distortion of
domestic economic institutions, internal poverty and inequality, and political repression”
(ibid: p.282). In other words, it seemed that capitalist dependent development and ‘socialist
variant of dependency’, if there was any, were characterized by qualitative differences. In
contrast to capitalist dependent development, the large-scale industrialization under Soviet
political control generated both material benefits and increasing standard of living for East
European population. Apart from that external economic exploitation, which happened to be
a crucial feature dependent capitalism, was more or less absent within the Soviet bloc. In fact,
within the Soviet bloc, ‘dependency’ relationships appeared to be more ‘political’ than
‘economic’ while in the capitalist world ‘dependency’ was basically economic with serious
political consequences.

Secondly, has dependency theory come to an end? Has it completed the cycles of its natural
life? According to Frank, probably it does – but, at the same time it can hardly be denied that
such an apparent rejection may lead to further rejuvenation of dependency theory. In one of
his brilliant articles, Frank (1974) has distinguished two types of ‘dependence’ theory. One
variant has been described as ‘old developmentalist dependence’ theory, as represented by
Martinelly, Bodenheimer and others. They tend to give emphasis on the existence of
‘dualism’ both at national and international levels. The other variant has been described as
‘new left group’ which includes scholars like dos Santos, Cardoso, Frank and others. This
group concentrates on “imperialist relations and the domestic, conscious and voluntary
participation of Latin America in the neo-imperialist system under bourgeois – including
progressive national – leadership as manifested in the ‘new dependence’ of the 1960s”
(Frank: 1974: p.89). In fact, changes in the international political economy of the late 1960s
and early 1970s offered challenges to existing theories of dependency. Briefly those changes
were reflected in the declining rate growth, profits and investment in developed countries,
passage from bi-polarity to re-emerging multi-polarity, failure of new social democratic
movements, emergence of neo-fascist threats, economic and diplomatic offensive of ‘social
imperialism’, emergence of sub-imperialist forces, such as India, Beazil, South Africa, Iran
and Israel, outbreak of conflicts among and within third world countries and others. To
Frank, during this period, dependency had been attacked from three different viewpoints. The
first group had been described as ‘the backward looking rightwing’ group which considered
dependency theory as “ideological rather than empirical, prophetic in tone rather than
analytic in content” (ibid: p.91). The second group has been called ‘the traditional Marxist
Left’ which considered this theory absolutely non-Marxist as its “emphasises distribution to
the total and virtual exclusion of production” (ibid: p. 92). The third group had been
described as ‘the forward looking new left’. While some members of this group, To Frank,
did not advance their critical works, and others tended to put together existing knowledge and
offered, to Frank, “conclusions which allow and force friends and enemies alike to push their
own research and analysis into different areas” (ibid: p. 97). Here Frank reflects his optimism
– to him, such ‘counter-offensives’ do not automatically bring dependence to an end. Rather,
such critiques may advance “the analysis of the process of capital accumulation in the world”
(ibid: p. 102) in changed circumstances.