Theory of dependence is the idea that resources flow from the "margins" of poor and backward countries into the "core" of rich countries, enriching the states at the expense of the first. It is a central debate of the theory of dependence that poor and poor poor countries are enriched by the way poor countries are integrated into the "world system".
This theory emerges as a reaction to the theory of modernization, a theory of earlier development which states that all societies progress through the same stages of development, that the underdeveloped region is thus thus in a situation similar to that occurring in the area developed in the past , and that, therefore, the task of helping the lagging regions of poverty is to accelerate them along this common path of development, in ways such as investment, technology transfer, and closer integration into world markets. Dependency theory rejects this view, arguing that underdeveloped countries are not only primitive versions of the developed countries, but have their own unique features and structures; and, importantly, to be in a situation of becoming a weaker member of the world market economy.
Dependency theory no longer has many advocates as a whole theory, but some authors argue for its continued relevance as a conceptual orientation to the global division of wealth.
Video Dependency theory
History
The theory of dependence comes from two papers published in 1949 - one by Hans Singer, one by RaÃÆ'ºl Prebisch - in which the authors observe that the terms of trade for the least developed countries relative to developed countries have deteriorated over time: the state underdeveloped countries can afford fewer and fewer manufactured goods from developed countries in exchange for a certain quantity of exports of their raw materials. This idea is known as the Prebisch-Singer thesis. Prebisch, an Argentine economist at the United Nations Commission for Latin America (UNCLA), went on to conclude that underdeveloped countries should use some degree of protectionism in trade if they enter the path of independent development. He argues that industrialization of import substitution (ISI), rather than trade and export orientation, is the best strategy for underdeveloped countries. This theory was developed from the Marxian perspective by Paul A. Baran in 1957 with the publication of his book The Political Economy of Growth. Dependency theory shares many points with previous Marxist theory, Marxist on imperialism by Rosa Luxemburg and Vladimir Lenin, and has attracted continuous interest from Marxists. Some authors identify two main streams in dependency theory: Latin American structures, characterized by Prebisch's work, Celso Furtado, and AnÃÆ'bal Pinto at the United Nations Economic Commission for Latin America (ECLAC, or, in Spanish, CEPAL); and American Marxists, developed by Paul A. Baran, Paul Sweezy, and Andre Gunder Frank.
Using the Latin American model of dependence, the Marxist Marxist historian Guyana Walter Rodney, in his book How Africa is backward Africa , described in 1972 an African that has been consciously exploited by European imperialists, leading directly to the modern backwardness of most continent.
This theory was popular in the 1960s and 1970s as a critique of the theory of modernization, which fell increasingly unpopular because of the continued widespread poverty in most of the world. It was used to explain the causes of overurbanization, a theory that the rate of urbanization extends beyond industrial growth in some developing countries.
Latin American structuralism and American Marxist schools have significant differences but agree on some basic points:
[B] The other group would agree that the core of the interdependence relationship between the center and periphery lies in the inability of the periphery to develop a process of technological innovation that is autonomous and dynamic. Promethean's technology-power released by the Industrial Revolution - is in the center of the stage. The Central States control technology and systems to produce technology. Foreign capital can not solve the problem, because it only leads to limited technology transmission, but not the process of innovation itself. Baran and others often speak of the division of international laborers at the center; not skilled at the edges - when discussing the main features of dependence.
Baran puts surplus extraction and capital accumulation at the center of his analysis. Development depends on a population that produces more than is needed for subsistence (surplus). Furthermore, a portion of the excess must be used for capital accumulation - the purchase of new production equipment - if development will occur; spending a surplus on things like fancy consumption does not produce development. Baran notes two types of dominant economic activity in poor countries. In the older of the two, plantation agriculture, dating from colonial times, most of the surplus goes to landowners, who use it to imitate the consumption patterns of rich people in the developed world; much of it goes to buy foreign manufactured luxury goods - automobiles, clothing, etc. - and a little accumulation to invest in development. A newer type of economic activity on the outskirts is industry - but of a certain kind. Usually done by foreigners, although often associated with local interests. Often with special tariff protection or other government concessions. The surplus of this production mostly goes to two places: some are sent back to foreign shareholders as a profit; other parts are spent on conspicuous consumption in the same way as the plantation aristocracy. Again, little used for development. Baran thinks that a political revolution is needed to break this pattern.
In the 1960s, members of the Latin American Structuralist school argued that there was more latitude in the system than Marxists believed. They argue that it allows for partial development or "dependent development" development, but is still under the control of outside decision-makers. They cited part of the successful industrialization efforts in Latin America around that time (Argentina, Brazil, Mexico) as evidence for this hypothesis. They point to the position that dependence is not a relationship between commodity exporters and industrialized countries, but between countries with different levels of industrialization. In their approach, there is a difference between economic and political: economically, a person can be developed or underdeveloped; but even if (somewhat) developed economically, one can be politically autonomous or dependent. More recently, Guillermo O'Donnell argues that the constraints placed on development by neoliberalism were repealed by a military coup in Latin America that came to promote development in an authoritarian guise (O'Donnell, 1982).
The importance of multinationals and the promotion of state technology is emphasized by Latin American Structuralists.
Fajnzybler has made the distinction between systemic or authentic competitiveness, which is the ability to compete on the basis of higher productivity, and false competitiveness, which is based on low wages.
The third world debt crisis of the 1980s and continuing stagnation in Africa and Latin America in the 1990s raised doubts about the feasibility or desire for "dependent development".
The sine qua non of dependence is not a difference in technological sophistication, as traditional theory theorists believe, but the differences in financial power between core and peripheral states - in particular the inability of peripheral states to borrow in their own currency. He believes that the hegemonic position of the United States is very strong because of the importance of its financial markets and because it controls the international reserve currency - the US dollar. He believes that the end of the Bretton Woods international financial agreement in the early 1970s was enough to strengthen the position of the United States for removing some constraints on their financial actions.
The "Standard" dependency theory differs from Marxism, in opposing internationalism and the hope of progress in a less developed country toward industrialization and a liberating revolution. Theotonio dos Santos describes "new dependence", which focuses on the internal and external relations of less developed suburbs, derived from Marxist analysis. Former Brazilian President Fernando Henrique Cardoso (in the 1995-2002 office) wrote extensively on the theory of temporary dependence in political isolation during the 1960s, arguing that it was an approach to study the economic gap between center and periphery. Cardoso summarizes his versions of dependency theory as follows:
- there is financial and technological penetration by the advanced capitalist centers of the peripheral and semi-periphery countries;
- This results in an unbalanced economic structure both within the peripheral society and between them and the centers;
- This leads to restrictions on self-growth at the periphery;
- this supports the emergence of a special pattern of class relationships;
- This requires modification in the role of the state to ensure both the economic functioning and political articulation of society, which contains, in itself, the focus of inarticulateness and structural imbalances.
The analysis of patterns of development in the 1990s and beyond is complicated by the fact that capitalism develops smoothly, but with very strong and repeating ebbs, called cycles. Relevant results are given in studies by Joshua Goldstein, Volker Bornschier, and Luigi Scandella.
With the growth of the Indian economy and some East Asian economies, the theory of dependence has lost some of its previous influence. This still affects several NGO campaigns, such as Make Poverty History and fair trade movements.
Maps Dependency theory
The other two early authors relevant to the theory of dependence are FranÃÆ'§ois Perroux and Kurt Rothschild. Other leading dependency theorists include Herb Addo, Walden Bello, Ruy Mauro Marini, Enzo Faletto, Armando Cordova, Ernest Feder, Pablo GonzÃÆ'¡lez Casanova, Keith Griffin, Kunibert Raffer, Paul Israel Singer, and Osvaldo Sunkel. Many of these authors concentrated their attention on Latin America; the leading dependency theorist in the Islamic world is the Egyptian economist Samir Amin.
Tausch, based on Amin's work from 1973 to 1997, lists the following key features of peripheral capitalism:
- Regression in both small-scale agriculture and industry marks the period after the onslaught of foreign domination and colonialism
- Uneven international specialization of periphery leads to concentration of activities in export-oriented agriculture and or mining. Some industrialization on the periphery is possible under low-wage conditions, which, together with increased productivity, dictate that unequal exchanges occur (trade double terms & lt; 1.0; see Raffer, 1987)
- This structure determines in the long run the rapidly growing tertiary sector with hidden unemployment and the increasing importance of rent in the overall social and economic system
- The account deficit goes on chronically, re-exported profits from foreign investment, and inadequate business cycle on the periphery that provides an important market for the center during the world economic upswing.
- Structural imbalances in political and social relationships, among other things, are strong 'comprador' elements and the increasing importance of country capitalism and the heavily indebted class of state.
American sociologist Immanuel Wallerstein refined the Marxist aspects of the theory and expanded it, to form the world system theory. This is a postulate of a third country category, semi-periphery , medium between core and periphery. Wallerstein believes in a tri-modal system rather than a bi-mode because he views the world system more complicated than a simple classification as a core or periphery state. For Wallerstein, many countries do not fit into either of these two categories, so he proposes a semi-peripheral idea as among the states in his model. In this model, semi-periphery is industrialized, but with less technological sophistication than at its core; and it does not control finances. The appearance of a semi-periphery group tends to be at the cost of other groups, but the unbalanced world economic structure based on an unbalanced exchange is likely to remain stable. Tausch traces the beginnings of world-system theory to the writings of Karl Polanyi, an Austro-Hungarian socialist after the First World War, but his present form is usually associated with the work of Wallerstein.
Theoretical dependence has also been linked to the structural theory of imperialism Johan Galtung.
Dependency theorists argue that short-term growth remains, long-term growth in the periphery will be unbalanced and unbalanced, and will tend toward a high negative account balance. Cyclic fluctuations also have a profound effect on the cross-national comparison of economic growth and community development in the medium to long term. What looks like spectacular long-term growth may eventually turn into a short-term cycle spike after a long recession. The cycle time plays an important role. Giovanni Arrighi believed that the logic of accumulation on a world scale shifted over time, and that the 1980s and so on again showed the phase of deregulation of world capitalism with logic, characterized - in contrast to the previous regulatory cycle - by the dominance of financial capital.
It is said that, at this stage, the role of unequal exchange in all dependence relationships can not be underestimated. Unequal exchanges are given if the trading dual terms of each country are & lt; 1.0 (Raffer, 1987, Amin, 1975).
Criticism
Economic policies based on the theory of dependence have been criticized by free market economists such as Peter Bauer and Martin Wolf and others:
- Lack of competition: by subsidizing the domestic industry and preventing outside imports, these companies may have fewer incentives to improve their products, to try to be more efficient in the process, to please customers, or to conduct research new innovation.
- Sustainability: industries that depend on government support may not be sustainable for a long time, especially in poor countries and countries that rely heavily on foreign aid from more developed countries.
- The cost of domestic opportunities: subsidies to domestic industries out of the state coffers and therefore represent money not spent in other ways, such as the construction of domestic infrastructure, start-up capital or social welfare programs based on need. At the same time, higher prices caused by tariffs and import restrictions require people to cancel these items altogether or buy them at a higher price, other items that do not exist.
Market economists cite a number of examples in their arguments against the theory of dependence. The rise of the Indian economy after moving from state-controlled businesses to open trade is one of the most frequently cited ( see also Indian economy, The Commanding Heights ). The Indian example seems to contradict the claims of dependency theorists on comparative and mobility advantages, as much as their economic growth derived from movements such as outsourcing - one of the most mobile forms of mobile transfer. South Korea and North Korea provide another example of trade-based development vs. autocratic self-sufficiency. After the Korean War, North Korea pursued a policy of industrialization of import substitution as suggested by the theory of dependence, while South Korea pursued an export-oriented industrialization policy as suggested by the theory of comparative advantage. In 2013, South Korea's GDP per capita is 18 times that of North Korea. In Africa, countries that have emphasized the development of import substitutes, such as Zimbabwe, are usually among the worst performers, while the most successful non-oil economies in the continent, such as Egypt, South Africa and Tunisia, have pursued development trade.
Source of the article : Wikipedia
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