Our President Is Optimistic About United Nations General Assembly Meetings, But Is Dependency Theory Still Relevant Today?
by Mahmud Tim Kargbo
Dependency thoughts haven’t lost their relevance yet. Today, they are useful in analysing recurring financial crises, the reckless use of natural resources, and widening inequalities across the African continent and other developing countries.
The issue with mainstream international relations (IR) theories is that Western perspectives and schools of thought predominate. Global events are almost always seen solely through the lens of the West. As a result, the voices of the rest and the concerns of the oppressed are ignored and bluntly dismissed.
Dependency theory is one of the popular contributions of African and Latin American scholars and emerged as a critique of various Western perspectives, including the idea of modernisation and development as we know it.
From the 1950s to the 1980s, there was a wave of decolonisation throughout the African continent and beyond, and as a result, various newly independent nations came into existence. Initially, these newly freed and newly formed states experienced rapid economic growth, better than that of 19th-century Europe. Based on these observations, it was believed that modernisation was a universal phenomenon, and by adopting and accepting it, these traditional societies could transform themselves into “modern” and “developed” entities.
The fundamental problem with this argument was that development was directly linked to Western values and behaviour, and non-Western perspectives of development were ignored and negated. As Andre Gunder Frank noted in the 1960s, most historians studied only developed metropolitan countries and paid scant attention to colonial and underdeveloped lands (Gunder Frank, 1966).
A leading misconception that the historical experiences of the developed and the underdeveloped were the same undermined the colonial experiences of the underdeveloped. Frank argued that underdevelopment is not a natural phenomenon, and contrary to the argument, developed countries were not “underdeveloped” before they transitioned into development. In addition, Frank illustrated, based on historical research, that underdevelopment was the historical product of the past and a byproduct of the continuing economic and other relations between the underdeveloped satellite countries and the developed metropolitan countries. Frank argued these relations were an essential part of the capitalist system on a global scale. (Gunder Frank, 1966).
Dependency theory emerged as a critically evaluated counter-Western perspective on the international system.
The core-periphery relationship in the international system meant the existence of a rigid division of labour on an international level, where the periphery or the satellites supplied raw materials, cheap minerals, and human resources to the core states. The core functioned as a depository of surplus capital. The flow of money, goods, and services into the periphery and the allocation of resources were determined by the economic interests of the core (i.e., dominant states) and not by the economic interests or needs of the periphery (i.e., dependent states). In addition, the core, a concept that can be equated with the Marxist notion of imperialism, solely managed political and economic power.
So, dependency theory emerged as a critically evaluated counter-Western perspective on the international system, and scholars such as Theotonio Dos Santos, Raul Prebisch, Andre G. Frank, and Samir Amin contributed significantly to the domain of dependency scholarship.
In short, the central propositions of dependency theory were:
Underdevelopment is a condition fundamentally different from development. Underdevelopment refers to a situation in which resources are being actively extracted and used for the benefit of the dominant or core, not for the poor, in which resources are found (i.e., the periphery).
Dependency theory advocates for better and alternative uses of resources, rather than complying with actions imposed by the dominant core states.
Dependency theorists rely on the belief that national economic interests can and should be articulated for each country. The proponents of dependency theory believe that this national interest can only be achieved by addressing the needs of the poor and the marginalised.
The diversion of resources over time is maintained not only by the power of the dominant states but also through the power of elites in the dependent states. Dependency theorists argued these elites maintained a dependent relationship because their private interests coincided with the interests of the dominant states.
The relevance of dependency thoughts in today’s world
Within the main theme of dependency, we can see several dependencies and inequalities at play: dependency in trade, finance, and technology. As Dos Santos argued, “trade relationships are based on monopolistic control of the market, which leads to the transfer of surplus generated in independent countries to the dominant countries” (Dos Santos, 1970). The dependent countries became exporters of raw materials and primary goods and could not compete with the core developed states.
This discrepancy persists today, in one form or another. For instance, tariff barriers continue to affect developing nations like Sierra Leone. The prices of primary goods are decreasing in the global market, which is affecting developing countries and their ability to develop.
Dos Santos already argued in the 1970s that in the dependency framework, financial relations are largely regulated by the viewpoint of the dominant countries based on loans and exports of capital, which permitted them to receive interest and profit, engendered domestic surpluses, and strengthened their control over the economies of other countries (Dos Santos, 1970). This is still what we see today.
Dependency scholars also argued that when developing countries opened their financial markets and integrated into the world economy, foreign capital controlled their economic resources, and, rather than following a developmental strategy, a particular financial interest prevailed. This, too, is what we see in the contemporary global political economy.
Technological dependency is another important aspect of explaining global inequalities. Dependency scholars argued the core had a technological monopoly that conditioned the periphery’s industrial development. The transfer of technology, if there was any, was more beneficial for the core countries as it protected their interests and left developing nations dependent on the monopoly of the core. It was, dependency scholars argued, too costly for developing countries to develop their own technology.
On some occasions, however, dependency limited the technology transfer to the periphery, and dominant states only deposited obsolete technologies in developing countries, generating a system of inherent industrial backwardness and dependency. This left the least developed countries to rely on developed or developing countries’ new technologies, as major technological innovations and gains in productivity largely occurred in developed countries, and the least developed countries lagged and could not compete in areas of new product development and production (Balaam, 2006).
If we look at the amount of substandard technology and used digital products that are dumped in the developing world today, we can clearly see that propositions made by dependency scholars in relation to “technology transfer” still exist today. With valuable technology, be it digital or medical, developing countries depend still on the so-called core countries.
Dependency theory and the global financial crises
According to Karl Marx, socialism would eventually replace capitalism as a historical stage that had stagnated because of internal contradictions.
If we inspect history, we can see that human experiences of capitalism have resulted bitterly. We saw a huge slump as the Great Depression in 1930, followed by the Great Recession of 2008, which is considered the worst global financial crisis since the Great Depression. In hindsight, of the 2008 crisis, dependency theory provides an opportunity to explain global inequalities.
The global financial crisis led to a decline in financial aid to developing countries, which further deteriorated their socio-economic problems and eventually widened the gap between the West and the rest of the world. Second, developing countries found it challenging to access capital whenever they needed it, because of the control and regulation of major financial institutions by developed nations.
As the 2008 financial crisis was in full swing, Annan, Camdessus, and Rubin wrote a piece in the Financial Times and argued for a “new global system of financial governance”, which should also involve more countries from Africa and the rest of the world. “Poorer countries need a voice at the table, too”, they argued. This call for stronger involvement of countries in a new global system of financial governance also proves the relevance of the dependency perspective for understanding today’s global inequalities.
The financial crisis of 2008 showed the inefficiency of the global capitalist system and questioned the strengths of the new liberal economic philosophy in contributing to economic equality. According to Petras & Veltmeyer (2015), capitalism as new liberal globalisation provides a very poor model for changing society toward social equality, participatory democratic decision-making, and human welfare.
Dependency and beyond:
The problem with dependency thoughts is argued to be their tendency toward overt generalisation, as dependency is not a clear and linear construct, but something that is fluid and changes.
Originally, dependency theorists argued that the ideal way to break out of the dependency trap and global inequality was for the periphery to separate from the core, but the post-Cold War era led to further integration rather than separation. We have also seen various examples of how separation from the core was not the key to resolving perpetual dependency and inequality in global power structures.
When considering the role of the capitalist system in the periphery’s underdevelopment, the global financial crisis of 2008 provides an opportunity to contemplate the relevance of the dependency theory in explaining global inequalities. One needs, however, to be cautious when using dependency theory as a generalised approach, as any disturbance in core countries will not automatically lead to a negative effect on the development of the periphery.
Like any other theory, dependency theory, too, has been admired and criticised, and naturally, it has its strengths and weaknesses. In today’s realm, dependency thoughts are still useful in analysing the widening inequalities between poor and rich countries or in analysing the divisions within a developed or developing country context. Our societies are vastly divided, and dependent relations exist within our own social fabric.
So, in the past, dependency thoughts broke some political boundaries and explained the reasons wealthy nations were taking advantage of poor countries, and today dependency thoughts are useful in explaining recurring financial crises, the reckless use of natural resources, and widening inequalities across the African continent and other developing nations.
References
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Amid the turmoil, do not forget the poor | Financial Times. (n.d.). Financial Times. https://www.ft.com/content/c9c35622-a6a6-11dd-95be-000077b07658
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