Dependency Theory

Dependency theory, a concept that emerged from Latin American intellectual centers in the early 1960s as a critique of the development programs then advocated by policymakers in national and international institutions. While popularly accepted as a new development theory or paradigm, many scholars, such as Fernando Henrique Cardoso, Peter Evans, Theotonio Dos Santos, and Andre Gunder Frank, maintain that dependency theory offers an approach to the study of political development that is related to the Marxian tradition of dialectical analyses of historical structures and social processes within a dynamic global economy.

The central premise of the dependency conception of Latin American economic history is that underdevelopment was created by the expansion of European capitalism. The same process by which the developed world, the "core" countries of western Europe and North America, became developed and wealthy, is the same one by which Latin American countries on the "periphery" became dependent and impoverished. Since the conquest and colonization of the Americas, the Latin American economic system has provided imperial powers with the raw materials required for an expanding industrial base and with captive markets for their surplus products. Colonial policies fashioned a monocultural export orientation on Latin America that political independence in the early nineteenth century did not change. With the assistance of a domestic elite, commercial capital, followed by financial and manufacturing capital, penetrated the area, perpetuating the dependency of Latin American economies on the export of one or two primary commodities and the import of manufactured goods.

The inequitable terms of trade stifled industrial growth, for capital accumulation in a dependent country requires the continued acceptance of its primary materials in the developed world. A dependent country can grow and expand only as a reflection of the growth and development of the developed countries to which it is subordinated. While the developed countries can achieve self-sustaining growth, the economy of the dependent country, being oriented toward external markets that it cannot control, is exceptionally vulnerable to the periodic fluctuations in the international market.

Dependency analysts concluded that the solution to Latin American underdevelopment, contrary to the opinions of policymakers in Europe and North America, did not lie in increased penetration of Latin America by foreign capital. Whereas economic policymakers from the core countries advocated increased levels of foreign investment in Latin American industry as one of the solutions to underdevelopment and poverty, the dependency theorists argued that multinational industries would only strengthen the structure of international dependency, enrich the core, and impoverish the periphery. The immediate political implication of the dependency critique is that Latin America can only develop by severing its ties to the core and promoting self-sustaining economic growth through an industrialization program based on the expansion of the domestic market by agrarian reform and income redistribution.

Dependency theory provoked heated theoretical debates and inspired a wide range of empirical investigations. Charging that it was simply old Marxian wine in new Latin American bottles, critics (and some theorists) reduced it to simplistic hypotheses of external determination and domination by malicious foreign capitalists. Under continuous attack, dependency theory fell into disfavor to a substantial degree in the 1980s, even though it had established itself as one of the primary lenses through which scholars view Latin American political economy. It compelled scholars to analyze the dynamic international forces that condition Latin American development and distinguish it from the processes by which western Europe and North America have developed. While dependency theory undermined the assumptions on which previous development studies were based, its implicit political agenda has frequently been superseded by other models and approaches, such as post-imperialism, post-colonialism, imperial industrialization, and to some extent, postmodernism.

See alsoEconomic Development; Foreign Trade; Industrialization.

BIBLIOGRAPHY

Andre Gunder Frank, Latin America: Underdevelopment or Revolution (1969).

Theotonio Dos Santos, "The Structure of Dependency," in American Economic Review 60, no. 2 (May 1970): 231-236.

Ronald Chilcote and Joel Edelstein, Latin America: The Struggle with Dependency and Beyond (1974).

Fernando Henrique Cardoso, "The Consumption of Dependency Theory in the United States," in Latin American Research Review 12, no. 3 (1977): 7-24.

Fernando Henrique Cardoso and Enzo Faletto, Dependency and Development in Latin America (1979).

Tulio Halperin-Donghi, "'Dependency Theory' and Latin American Historiography," in Latin American Research Review 17, no. 1 (1982): 115-130.

Peter Evans, "After Dependency: Recent Studies of Class, State, and Industrialization," Latin American Research Review 20, no. 2 (1985): 149-160.

Additional Bibliography

Chilcote, Ronald H., ed. Development in Theory and Practice: Latin American Perspectives. Lanham: Rowman & Littlefield, 2003.

Roberts, J. Timmons, and Amy Hite, eds. The Globalization and Development Reader: Perspectives on Development and Global Change. Malden: Blackwell Pub., 2007.

Santiago, Silviano. The Space in Between: Essays on Latin American Culture. Ed. Ana Lúcia Gazzola. Trans. Tom Burns, Ana Lúcia Gazzola and Gareth Williams. Durham, NC: Duke University Press, 2001.

Seligson, Mitchell A., and John T Passé-Smith, eds. Development and Underdevelopment: The Political Economy of Global Inequality. 3rd ed. Boulder: Lynne Rienner Publishers, 2003.

                                           Paul J. Dosal