Assignment name

Assignment name: Module 1 Reflection Paper
Name: Meri Chachava
Handed in: 2018-09-21 00:29
Generated at: 2018-09-21 00:29

Lund University HT18
MIDA11 International Development Perspectives Meri Chachava

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Reflection paper
The Classical Dependency Theory

Introduction
It has been argued that “the idea of development in the post-1945 era was invented as a
geopolitical project to rescue countries recently liberated from the yoke of colonial rule
away from the lure of communism, and to steer them along a capitalist path” Veltmeyer,
H. and Bowles, P. (2018, p.1) Understanding of the nature and concept of development
are varied, multiple and are linked to the particular theories. Despite their differences,
they share the importance of understanding the character of the global relationship
between the developed and developing countries. In this sense, the main question in this
paper is: what’s the role of the wealthy country in relation to the poor country? This paper
aims to briefly review the Classical Dependency Theory and analyze its approaches to
development.

Key concepts
Dependency and Development
Dependency theory is an assembly of different theories including word system and neo-
Marxist Theory. Dependency theory argues that there are a number of different kinds of
states in the world and each of them performs a different function in the world economy.
To define the classical definition of dependence, So, A.Y. (1990, p. 98) states that the
“relationship between two or more countries assumes the form of dependence when
some countries (the dominant ones) can expand and can be self-starting, while other
countries (the dependent ones) can do this only as a reflection of that expansion” Dos
Santos (1971,p.226).

According to So, A.Y. (1990, p. 99) dependency theory is analyzed mostly as an economic
condition for example, “through monopolistic control of the market in trade relations, and
through loans and the export of capital in financial relations, there is a transfer of surplus
generated in dependent countries to dominant countries. For dependent countries, this
transfer results in the limitation of the development of their internal markets and their
technical and cultural capacities, as well as of the moral and physical health of their
people.”

Lund University HT18
MIDA11 International Development Perspectives Meri Chachava

In this term, So, A.Y. (1990 p. 123-124) describes a strategy called export-led
industrialization (ELI). “Through this strategy, Third World capitalists hoped to promote
industrialization and employment, earn foreign currency, and stimulate domestic capital
accumulation. From the dependency perspective, ELI represented a false promise for
establishing a self-expanding capitalist economy. In other words, he argues that ELI is
merely a new form of international capitalist domination and cannot serve as a model for
indigenous Third World development. First, for those Third World countries that had
carried out ELI, their industrial production was largely for export. Since their investment,
technology, and resource use were largely shaped by the consumer demands of the
advanced capitalist countries, their industrial production was mostly unrelated to the
needs of their workers and peasants”.

On the issue of the debt trap, dependency researchers point out that “after the Latin
American countries had borrowed money from the World Bank the IMF, and the Western
banks, they came under the tight control of these financial institutions. In addition,
dependency researchers point out that the debt trap exerted a profound impact on the
domestic societies of the debtor nations. First, there was the problem of currency
devaluation. Second, since the domestic currency was worth less than before, there was
a trend toward rising inflation. From the dependency perspective, the foreign debt
problem represents an intensification of financial dependency” So, A.Y. (1990 p.120-122).

Furthermore, for addressing the importance of political will to development, take some
examples from the world bank reports, “WDR78 comments on the fact that developing
countries have a disproportionately low presence on international decision-making and
regulatory bodies, and suggests that their development opportunities would be improved
if they had more bargaining presence and power in such ‘global’ forums (WDR78: 66).
The ‘poverty report’ of 1980 takes the industrialized countries to task for directing bilateral
aid to their strategic partners rather than towards the poorest nations of the world”
(WDR80: 29–30).
Dependency theory defines this “strategic partnership” harmful for developing countries
and argues that peripheral countries should detach their connection with core countries.
“Instead of relying upon foreign aid and foreign technology, peripheral countries should
adopt a self-reliance model-relying upon their own resources and planning their own
paths of development so as to achieve independence and autonomous national
development” So, A.Y. (1990 p. 105).

Lund University HT18
MIDA11 International Development Perspectives Meri Chachava

Critics
The critics, however, tend to argue that there is a global division of labor between the
core and the periphery countries. The core countries focus on higher skills, capital-
intensive productions (industry, technology) meanwhile, countries in the periphery are
focused on low-skill, agricultural production and providing cheap labor.

According to So, A.Y. (1990 p. 133), “dependency and development may coexist and that
dependency may not necessarily lead to underdevelopment. For example, South Korea
and Taiwan were once colonies of Japan, yet these two countries have attained rapid
economic development since World War II. Countries such as Canada are “dependent”
in the sense that their economies have been penetrated by foreign-owned subsidiaries,
yet Canada exhibits a standard of living higher than that of most Third World countries”
Warren (1973).
The dependency schools critics argue that “no matter how strong the dominating effects
of the core countries, they also represent opportunities for ideas, institutions, and
technologies that can be used by peripheral countries for change” So, A.Y. (1990 p.133-
134).
Portes (1976, p.79) remarks that “all historical evidence points to the existence of certain
‘degrees of freedom’ for a national government and their ability to carry out, under certain
circumstances, fairly drastic policies of internal and external transformation”.

Conclusion
Looking at the research question and reported outcomes, it can be said that developing
countries play a substantial role in the world trade, but the global economy that we
currently have today is structured against them. What the developing countries do is that
they actually supply core countries with cheaply made products which are sold in large
quantities in more developed countries. It is seen as an idea of neocolonialism, no longer
have core countries controlled less developed countries outright, but instead, they do it
through an economic means.
By analyzing the approaches of the dependency theory one might argue that the most
important obstacle to national development is not lack of right economic policies or their
authoritarian and corrupt government, rather it is the colonial background and the
continuation of the unequal international division of labor.

Finally, as So, A.Y. (1990 p.105) has summarized, “dependency is seen as incompatible
with development. Is development possible in the periphery? For the dependency school,
the answer is generally NO”.
Word counts: 1085

Lund University HT18
MIDA11 International Development Perspectives Meri Chachava

References

Kothari, U. (2005). A radical history of development studies: Individuals, institutions and
ideologies In Kothari, U. (ed) A radical history of development studies: Individuals,
institutions and ideologies, Zed Books. London, 7-17.

Mawdsley, E. and Rigg, J. (2003). The World Development Report II: continuity and
change in development orthodoxies. Progress in Development Studies, 3(4), 271-286.

So, A.Y. (1990). Social Change and Development: Modernization, Dependency and
World-System Theories, Sage. London. Chapters 5-8.

Veltmeyer, H. and Bowles, P. (2018) The Essential Guide to Critical Development
Studies, London and New York: Routledge, Introduction and Chapter 4, 73-83.

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