dependency studies

Rhoda Emilio

Ateneo de Davao University

Dependency StudiesDevelopment from a 3rd world perspectiveRepresents “voices from the periphery”A Latin American experiment patterned after ECLA in

the 60sProtectionism and industrialization through ISI (import

substitution industrialization)ECLA: UN Economic Commission for Latin America

Dependency StudiesWhy did latin America prefer the Chinese and Cuban

model of Marxist revolution?Because the Chinese and Cuban models skipped the

stage of bourgeoisie development and went straight to proletariat revolution

Dependency was a response to the failure of ECLA, crisis of orthodox Marxism and the decline of the modernization school in the United States

Dependency StudiesThe ECLA and Raul Prebisch

Latin America was providing food and raw materials and importing industrialized goods and this was the root of Latin America’s development problem

The pros and cons of ISINeo-marxists

Success of Chinese and Cuban Revolutions

Dependency StudiesAndre Gunder Frank

Modernization failed due to neglect of colonial past Contrary to US President Ronald Reagan’s assertion, 3rd

world countries cannot follow western model of development because of colonial past (also referred to as historical fiction, the belief that one country development story may be replicated by another country, especially an underdeveloped country)

Development of underdevelopment The closer the 3rd world country is to a 1st world country the

more the underdevelopment Metropolis-Satellite model

Dependency StudiesThere is transfer

of surplus from Satellite to Metropolis

1st World develops at the expense of 3rd World

National / 1st World / Core (Metropolis)

Local /3rd World /Periphery (Satellite)

Metropolis-Satellite model

Dependency Studies1st World (US, UK)

National Level (NCR/RP)

Regional Level (Region XI)

Local Level (Davao City

Village Level (people)

Satellites develop more when ties to Metropolis are weakest Those that had closest ties before are now the poorest

Dependency Studies

Dependency StudiesSamir Amin

Theory on transition to peripheral capitalism It’s different from transition to central capitalism (cotton in India was

replaced not by Indian-made cotton but by British-made cotton which led to the death of India’s local cotton industry)

Extraversion – distortion towards export activities (due to the superior quality of foreign goods, local manufacturers concede and does not compete anymore)

Hypertrophy of the tertiary sector of the periphery Multiplier effects of investment not applicable to periphery (Keynesian

economics not applicable to 3rd world countries) Historical fiction (underdeveloped countries now should not be

compared to developed countries in their early stages of development)


Ascent and decline is largely being determined in our age by the following ‘five monopolies’ The monopoly of technology, supported by military

expenditures of the dominant nations The monopoly of control over global finances and a

strong position in the hierarchy of current account balances

The monopoly of access to natural resources The monopoly over international communication and

the media The monopoly of the military means of mass destruction


Four main characteristics of the peripheral societal formation: The predominance of agrarian capitalism in the

‘national’ sector The formation of a local bourgeoisie, which is

dependent from foreign capital, especially in the trading sector

The tendency of bureaucratization Specific and incomplete forms of proletarization of

the labor force


Structural deformations of the role of peripheries in the world system Rapid urbanization, combined with an insufficient

local production of food Excessive expenditures of the local bureaucracies Changes in income distribution to the benefit of the

local elites (demonstration effects) Insufficient growth of and structural imbalances in

the industrial sector Following reliance on foreign assistance

Dependency StudiesBasic assumptions of the dependency school

A very general process (applicable to all countries)Dependency an external conditionDependency an economic conditionDependency a component of regional polarization of the

global economy (underdevelopment in the periphery and development in the core are 2 aspects of a single process)

Dependency is incompatible with development

Rhoda EmilioAteneo de Davao University

Baran: Colonialism in IndiaThe debt trap in Latin AmericaLandsberg: Manufacturing imperialism in East Asia

Classical Dependency Studies

Classical Dependency StudiesPaul Baran: Colonialism in India

India was more highly developed in the 18th century than UK in terms of their economy

UK had yet to go through her industrial revolution yet UK had military superiority

10% of Indian GNP was appropriated by UK on a yearly basisUK instituted a program of de-industrialization in India –

why?The colonial government was never meant to promote the

economic development of the peripheryUK created a new class in India: clientele social classEven education was used to keep India from advancing

Classical Dependency StudiesThe debt trap in Latin America

How it started for Mexico Banking on the oil

How the international community reacted WB, IMF, Western banks Economic contraction Ramifications:

Currency devaluationInflationStagnant economic growthPolitical unrestAnti-Americanism

Classical Dependency StudiesWhat may happen:

Before, colonization of debtor state by creditor stateNow, waging of an economic war on debtor state by

creditor state Freezing of assets Economic blockade

The larger the foreign debt, the greater the outflow of domestic capital to the core!

Classical Dependency StudiesMartin Landsberg: Manufacturing imperialism

in East AsiaThe role of import-substituted industrialization (ISI):

why it failedWhy the shift to export-led industrialization (ELI)Classification of peripheral countries into two (2)

groups; what’s the distinction? What’s the irony?

Classical Dependency StudiesMartin Landsberg: Manufacturing imperialism

in East AsiaImpact of the ELI

Since geared for export, everything hinged on consumer demands of core

Periphery remained backward as technology remains in the core

Subcontracting process leaves periphery on the disadvantage TNCs can transfer base from periphery to lower periphery Periphery is at the mercy of a global economy in constant flux

Classical Dependency StudiesIn sum: How has foreign domination shaped

the development of the periphery?Dependency as an externally imposed condition

Main assumption: the imposition of external conditions on the periphery results in dependency, and dependency in turn steers the periphery in the direction of underdevelopment


the development of the periphery?Dependency as an externally imposed condition

Baran asserts that British colonialism contributed to the underdevelopment of India through plundering, de-industrialization and uprooting of local society

After Latin American countries borrowed money from the IMF, World Bank and other Western banks, they came under the tight control of these financial institutions

Landsberg contends that the TNCs method of subcontracting retained complete control over the research, design, transportation and marketing of the new wave of industrialization in East Asia


the development of the periphery?Dependency as an economic condition

Economic dimension of dependency begets cultural, political and social ramifications

Dependency as incompatible with development As long as dependency situation is not reversed, periphery will

not develop

Classical Dependency StudiesCritique of Classical Dependency Studies

It is merely a propaganda fragment of Marxist revolutionary ideology

It is highly abstractThe power of external forces was too exaggeratedSouth Korea, Taiwan and Canada have debunked the

assumption that dependency is incompatible with development

No clear recommendation was formulated as to how the dependency situation may be reversed

Rhoda EmilioAteneo de Davao University

Cardoso on BrazilO’Donell’s BA State in Latin AmericaEvans: Triple Alliance

New Dependency Studies

New Dependency StudiesCardoso on Brazil

Methodology is historical-structuralEmphasis is more on internal structures of dependency

rather than on the external structureFocus is on the sociopolitical aspect (class struggles,

group conflict, political movements) rather than just the economic aspect

Dependency is an open-ended processIt is possible to have dependency-associated development


Brazil’s military regimeForeign investors became more interested in the

manufacturing sector (factories and plants)Military technocrats gained more economic

experiencePopulist sectors (e.g. unionist, workers’ groups) lost

voice (representation)Traditional elites were displaced


Actors in Cardoso’s dependency-associated developmentMilitary state (bureaucratic-technocratic)Multinational corporations (MNCs)Bourgeoisie

New Dependency StudiesO’Donell’s BA State in Latin America

What are the defining characteristics? Dominance of bureaucrats Political exclusion (lack of representation and participation) Economic exclusion (monopolistic characteristic of state,

MNCs) Depoliticization Deepening of dependent capitalism

New Dependency StudiesEvan’s Triple Alliance

Transnational Corporations (TNCs)Local capitalBourgeoisie (entrepreneurial fraction of state

capitalists)

dependency studies

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