Dependency Theory or Dependencia Theory Is A Body of Social Science Theories Predicated On
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sudeshna86Dependency Theory or Dependencia Theory Is A Body of Social Science Theories Predicated On
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sudeshna86Dependency theory or dependencia theory is a body of social science theories predicated on the notion that resources flow from
a "periphery" of poor and underdeveloped states to a "core" of wealthy states, enriching the latter at the expense of the former. It is a central contention of dependency theory that poor states are impoverished and rich ones enriched by the way poor states are integrated into the "world system." The theory arose around 1970 as a reaction to modernization theory, an earlier theory of development which held that all societies progress through similar stages of development, that today's underdeveloped areas are thus in a similar situation to that of today's developed areas at some time in the past, and that therefore the task in helping the underdeveloped areas out of poverty is to accelerate them along this supposed common path of development, by various means such as investment, technology transfers, and closer integration into the world market. Dependency theory rejected this view, arguing that underdeveloped countries are not merely primitive versions of developed countries, but have unique features and structures of their own; and, importantly, are in the situation of being the weaker members in a world market economy, whereas the developed nations were never in an analogous position; they never had to exist in relation to a bloc of more powerful and economically advanced countries than themselves. Dependency theorists argued, in opposition to free market economists and modernization theorists, that underdeveloped countries needed to reduce their connectedness with the world market so that they can pursue a path more in keeping with their own needs, less dictated by external pressures.[1] The premises of dependency theory are that: 1. Poor nations provide natural resources, cheap labor, a destination for obsolete technology, and markets for developed nations, without which the latter could not have the standard of living they enjoy. 2. Wealthy nations actively perpetuate a state of dependence by various means. This influence may be multifaceted, involvingeconomics, media control, politics, banking and finance, education, culture, sport, and all aspects of human resource development (including recruitment and training of workers). 3. Wealthy nations actively counter attempts by dependent nations to resist their influences by means of economic sanctions and/or the use of military force. Dependency theory states that the poverty of the countries in the periphery is not because they are not integrated into the world system, or not 'fully' integrated as is often argued by free market economists, but because of how they are integrated into the system. Dependency theory originates with two papers published in 1949 one by Hans Singer, one by Ral Prebisch in which the authors observe that the terms of trade for underdeveloped countries relative to the developed countries had deteriorated over time: the underdeveloped countries were able to purchase fewer and fewer manufactured goods from the developed countries in exchange for a given quantity of their raw materials exports. This idea is known as the Singer-Prebisch thesis. Prebisch, an Argentine economist at the United Nations Commission
for Latin America (UNCLA), went on to conclude that the underdeveloped nations must employ some degree of protectionism in trade if they were to enter a self-sustaining development path. Many dependency theorists advocate social revolution as an effective means to the reduction of economic disparities in the world system. Poor nations are at a disadvantage in their market interactions with wealthy nations. There are several aspects to this. One is that a high proportion of the developing nations' economic activity consists of exports and imports from the developed nationsin many cases with only one or a few developed nations. By contrast, only a small proportion of the economic activity of the developed nations consists of trade with the developing nations; a developed nation's trade consists mostly of internal trade and trade with other developed nations. This asymmetry puts a poor nation in a weak bargaining position vis a vis a developed nation. There are also historical aspects: the poor nations are almost all former colonies of the developed nations; their economies were built to serve the developed nations in a twofold capacity: as sources of cheap raw materials and as highly populous markets for the absorption of the developed nations' manufactured output. According to Vernengo, the Latin American Structuralist and the American Marxist schools had significant differences but agreed on some basic points: [B]oth groups would agree that at the core of the dependency relation between center and periphery lays the inability of the periphery to develop an autonomous and dynamic process of technological innovation. Technology the Promethean force unleashed by the Industrial Revolution is at the center of stage. The Center countries controlled the technology and the systems for generating technology. Foreign capital could not solve the problem, since it only led to limited transmission of technology, but not the process of innovation itself.[5]
