Dependency Theory

Dependency Theory

Dependency theory is in essence, an extension of structuralism and rose out of the failures of ISI. Dependency theory was categorised in two groups; the first was the disillusioned structuralist and the radical neo-marxists. The essential difference between these two groups if that for the neo-marxist, revolutionary is key for development.

So what did the Neo-Marxist add to the structuralist theory?

• The one capitalist world we live in originates from the centre, and why the periphery never developed was because the centre never required them to develop. In fact, they used the periphery. 
• Development was blocked by the outflow of surplus from the centre to the periphery. 
• This enhanced by the class system and maintained by dominant classes such as landlord who even in the periphery countries benefit.
• The poor remain with the primary products because there is a dominant class in underdeveloped countries, who interests are aligned with centre interests.
• This is why the only way to break out of this cycle is with a revolution.
• This is not to say there hasn’t been any development at all, but what there has is self-sustaining and ISI just made it worse by increasing the dependency on the centre and dominant class for trade and capital. 
• So this is why a radical political change is needed to eradicate these class incentives. 

So in what ways in the periphery depend?

1. They are depend for foreign currency, as even for ISI you need imports. 
2. Foreign financing - as even when you exports are struggling to take off, imports still required, and BoP crisis is still present. 
3. Technology - even though the technology may not be in line with the periphery’s factors of production
4. TNCs and their growing role also shows the growing reliance on the centre’s culture.

Prescriptions - How do neo-marixists suggest we rectify this development problem?

• Except for political revolution there isn’t much they have to offer.
• Sutcliffe’s propose a criteria for Independent Industrialisation, e.g. ‘diversify industrial base’ or ‘production for domestic market’ . However, again there is a lack of prescription, is he advocating a more Soviet Autarkic Socialist Development even though that failed for the USSR?

Critiques:

1. Great analysis, but lack of an answer or solutions prescribed
2. There isn’t much evidence to make their theories valid
3. Their theory missing geographical and democratic factors which also play a key role in development
4. What about the positive affects of TNCs and global capital
5. Personally, I fail to see where this takes us in the development debate.