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College of Education School of Continuing and Distance Education 2014/2015 – 2016/2017 SOCI 423: THEORIES OF SOCIAL DEVELOPMENT Lecturer: Dr. James Dzisah Email: [email protected] SESSION 6: THE HISTORICAL CONTEXT AND THEORETICAL HERITAGE OF DEPENDENCY THEORY
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SESSION 6: THE HISTORICAL CONTEXT AND THEORETICAL … · THE HISTORICAL CONTEXT OF DEPENDENCY THEORY • The dependency school was also a response to the crisis of orthodox Marxism

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Page 1: SESSION 6: THE HISTORICAL CONTEXT AND THEORETICAL … · THE HISTORICAL CONTEXT OF DEPENDENCY THEORY • The dependency school was also a response to the crisis of orthodox Marxism

College of Education

School of Continuing and Distance Education2014/2015 – 2016/2017

SOCI 423:

THEORIES OF SOCIAL

DEVELOPMENT

Lecturer: Dr. James Dzisah

Email: [email protected]

SESSION 6:THE HISTORICAL CONTEXT AND THEORETICAL

HERITAGE OF DEPENDENCY THEORY

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SESSION OVERVIEW

• This section introduces students to the historical context inwhich Dependency Theory thrives and the intellectualheritage underpinning the Dependency School.

• Goal/Objective: by the end of the session, the student willbe able to:

• Explain the historical context of the Dependency School.

• Understand the intellectual heritage basis of DependencyTheory

• Define dependency theory

• Explain the basic propositions of Dependency Theory

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SESSION OUTLINE

• Historical context of Dependency theory

• The intellectual heritage of Dependency School

• Definitions of Dependency theory

• Central Propositions of dependency theory

• Activity

• References

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THE HISTORICAL CONTEXT OF DEPENDENCY THEORY

• In the late 1960s the modernization school was challenged bythe radical dependency school. The dependency school canbe said to view development from a Third World perspective.

• According to Bloomstrom and Hettne (1984), the dependencyschool represents ‘the voices from the periphery’ thatchallenge the intellectual hegemony of the Americanmodernization school.

• The dependency school first arose in Latin America as aresponse to bankruptcy of the program of the U.N. economicCommission for Latin America (NECLA) in the early 1960s.

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THE HISTORICAL CONTEXT OF DEPENDENCY THEORY

• The dependency school was also a response to the crisis oforthodox Marxism in Latin America in the early 1960s

• The indigenous Latin American dependency school spread toNorth America. Andre Gunder Frank, who happened to be inlain America in the early 1960s, was instrumental indisseminating the ideas of dependency school to English-speaking world.

• The dependency school received a warm welcome in theunited States in the late 1960s because it resonated with thesentiments of a new generation of young radical researcherswho came of age

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THE INTELLECTUAL HERITAGE OF DEPENDENCY THEORY

• Dependency Theory developed in the late 1950s underthe guidance of the Director of the United NationsEconomic Commission for Latin America, Raul Prebisch.

• Prebisch and his colleagues were troubled by the factthat economic growth in the advanced industrializedcountries did not necessarily lead to growth in the poorercountries.

• Indeed, their studies suggested that economic activity inthe richer countries often led to serious economicproblems in the poorer countries.

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THE INTELLECTUAL HERITAGE OF DEPENDENCY THEORY

• Such a possibility was not predicted by neoclassical theory,which had assumed that economic growth was beneficial to all(Pareto’s optimal) even if the benefits were not always equallyshared

• Prebisch's initial explanation for the phenomenon was verystraightforward:

• Poor countries exported primary commodities to the richcountries that then manufactured products out of thosecommodities and sold them back to the poorer countries.

• The "Value Added" by manufacturing a usable product alwayscost more than the primary products used to create thoseproducts.

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THE INTELLECTUAL HERITAGE OF DEPENDENCY THEORY

• Therefore, poorer countries would never be earningenough from their export earnings to pay for their imports.

• Prebisch's solution was similarly straightforward:

• Poorer countries should embark on programs of importsubstitution so that they need not purchase themanufactured products from the richer countries.

• The poorer countries would still sell their primary productson the world market, but their foreign exchange reserveswould not be used to purchase their manufactures fromabroad.

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THE INTELLECTUAL HERITAGEOF DEPENDENCY THEORY:

• Three issues made this policy difficult to follow.

• The first is that the internal markets of the poorer countrieswere not large enough to support the economies of scale usedby the richer countries to keep their prices low.

• The second issue concerned the political will of the poorercountries as to whether a transformation from being primaryproducts producers was possible or desirable.

• The final issue revolved around the extent to which the poorercountries actually had control of their primary products,particularly in the area of selling those products abroad.

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THE INTELLECTUAL HERITAGE OF DEPENDENCY THEORY

• These obstacles to the import substitution policy ledothers to think a little more creatively and historically atthe relationship between rich and poor countries.

• At this point dependency theory was viewed as a possibleway of explaining the persistent poverty of the poorercountries.

• The traditional neoclassical approach said virtually nothingon this question except to assert that the poorer countrieswere late in coming to solid economic practices and that assoon as they learned the techniques of modern economics,then the poverty would begin to subside.

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SESSION 5: DEPENDENCY THEORY: THE INTELLECTUAL HERITAGE

• Another theoretical tradition upon which thedependency school draw is neo-Marxism.

• The success of Chinese and Cuban revolutions helpedto spread a new form of Marxism to Latin America

• Marxists theorists viewed the persistent poverty as aconsequence of capitalist exploitation.

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DEFINITIONS OF DEPENDENCY THEORY

• Dependency can be defined as an explanation of the economicdevelopment of a state in terms of the external influences—political, economic, and cultural—on national developmentpolicies.

• Theotonio Dos Santos (1971: 226) emphasizes the historicaldimension of the dependency relationships in his definition:

• [Dependency is]...an historical condition which shapes a certainstructure of the world economy such that it favors somecountries to the detriment of others and limits the developmentpossibilities of the subordinate economics...a situation in whichthe economy of a certain group of countries is conditioned bythe development and expansion of another economy, to whichtheir own is subjected

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DEFINITIONS OF DEPENDENCY THEORY

• There are three common features to these definitions which mostdependency theorists share.

• First, dependency characterizes the international system ascomprised of two sets of states, variously described asdominant/dependent, center/periphery or metropolitan/satellite.

• The dominant states are the advanced industrial nations in theOrganization of Economic Cooperation and Development (OECD).

• The dependent states are those states of Latin America, Asia, andAfrica which have low per capita GNPs and which rely heavily on theexport of a single commodity for foreign exchange earnings.

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DEFINITIONS OF DEPENDENCY THEORY

• Second, both definitions have in common the assumption thatexternal forces are of singular importance to the economicactivities within the dependent states.

• These external forces include multinational corporations,international commodity markets, foreign assistance,communications, and any other means by which the advancedindustrialized countries can represent their economic interestsabroad.

• Third, the definitions of dependency all indicate that therelations between dominant and dependent states are dynamicbecause the interactions between the two sets of states tend tonot only reinforce but also intensify the unequal patterns.

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DEFINITIONS OF DEPENDENCY THEORY

• Moreover, dependency is a very deep-seated historical process,rooted in the internationalization of capitalism.

• Dependency is an ongoing process: Latin America is today, andhas been since the sixteenth century, part of an internationalsystem dominated by the now-developed nations...Latinunderdevelopment is the outcome of a particular series ofrelationships to the international system.

• In short, dependency theory attempts to explain the presentunderdeveloped state of many nations in the world byexamining the patterns of interactions among nations and byarguing that inequality among nations is an intrinsic part ofthose interactions.

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CENTRAL PROPOSITIONS OF DEPENDENCY THEORY

1. Underdevelopment is a condition fundamentallydifferent from undevelopment.

• The term undevelopment simply refers to a conditionin which resources are not being used. For example,the European colonists viewed the North Americancontinent as an undeveloped area: the land was notactively cultivated on a scale consistent with itspotential.

• Underdevelopment refers to a situation in whichresources are being actively used, but used in a waywhich benefits dominant states and not the poorerstates in which the resources are found.

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SESSION 5: DEPENDENCY THEORY: CENTRAL PROPOSITIONS

2. The distinction between underdevelopment and undevelopmentplaces the poorer countries of the world in a profoundly differenthistorical context.

• These countries are not "behind" or "catching up" to the richercountries of the world.

• They are not poor because they lagged behind the scientifictransformations or the Enlightenment values of the European states.

• They are poor because they were coercively integrated into theEuropean economic system only as producers of raw materials or toserve as repositories of cheap labor, and were denied the opportunityto market their resources in any way that competed with dominantstates.

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CENTRAL PROPOSITIONS OF DEPENDENCY THEORY

3. Dependency theory suggests that alternative uses of resources are

preferable to the resource usage patterns imposed by dominant states.

There is no clear definition of what these preferred patterns might be, but

some 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.

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CENTRAL PROPOSITIONSOF DEPENDENCY THEORY:

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.

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CENTRAL PROPOSITIONS OF DEPENDENCY THEORY

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 dominant states, but

also through the power of elites in the dependent 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.

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Activity

• Explain the factors that led to the emergenceof the dependency school

• What are the key historical markers thatunderpins the dependency school

• What are the central propositions ofdependency theory?

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References

• Harrison, D. 1988. The Sociology of Modernisation and Development.London: Macmillan.

• Roberts, J. Timmons, and Bellone Hite, A. (eds.) (2007). The Globalizationand Development Reader: Perspectives on Development and GlobalChange. Oxford: Blackwell Publishing.

• Rodney, W. 1972. How Europe Underdeveloped Africa. London: Bogle-L'Ouverture Publications; Dar es Salaam: Tanzania Publishing House.

• So, A. Y. 1990. Social Change and Development. London: SagePublishing, chapter 5, pages 91-95.

• Webster, A. 1990. Introduction to the Sociology of Development.London: Macmillan Press Ltd.