Editing Dependency theory (section)

==History==
Dependency theory originates with two papers published in 1949, one by [[Hans Singer]] and one by [[Raúl 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 [[Final good|manufactured goods]] from the developed countries in exchange for a given quantity of their raw materials exports. This idea is known as the [[Prebisch–Singer thesis]]. Prebisch, an Argentine economist at the [[United Nations Economic Commission for Latin America and the Caribbean|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. He argued that [[Import substitution industrialization|import-substitution industrialisation]] (ISI), not a [[Export-oriented industrialization|trade-and-export orientation]], was the best strategy for underdeveloped countries.<ref>Short [http://homepage.newschool.edu/het/profiles/prebisch.htm Prebisch biography] {{webarchive|url=https://web.archive.org/web/20090812085123/http://homepage.newschool.edu/het/profiles/prebisch.htm |date=2009-08-12 }} at Newschool; retrieved July 2009.</ref> The theory was developed from a [[Marxian economics|Marxian]] perspective by [[Paul A. Baran]] in 1957 with the publication of his ''The Political Economy of Growth''.<ref name=":2">{{harvnb|Vernengo|2004|p=5}}</ref> Dependency theory shares many points with earlier, Marxist, theories of [[imperialism]] by [[Rosa Luxemburg]] and [[Vladimir Lenin]], and has attracted continued interest from Marxists. Some authors identify two main streams in dependency theory: the Latin American [[Structuralist economics|Structuralist]], typified by the work of Prebisch, [[Celso Furtado]], and [[Aníbal Pinto Santa Cruz|Aníbal Pinto]] at the [[United Nations Economic Commission for Latin America]] (ECLAC, or, in Spanish, CEPAL); and the American Marxist, developed by [[Paul A. Baran]], [[Paul Sweezy]], and [[Andre Gunder Frank]].

Using the Latin American dependency model, the Guyanese Marxist historian [[Walter Rodney]], in his book ''[[How Europe Underdeveloped Africa]]'', described in 1972 an Africa that had been consciously exploited by European imperialists, leading directly to the modern underdevelopment of most of the continent.<ref>Rodney, W. (1972). "How Europe underdeveloped Africa". ''Beyond borders: Thinking critically about global issues'', 107-125.</ref>

The theory was popular in the 1960s and 1970s as a criticism of modernization theory, which was falling increasingly out of favor because of continued widespread poverty in much of the world. At that time the assumptions of liberal theories of development were under attack.<ref>{{Cite book|title=Encyclopedia of the City|last=Caves|first=R. W.|publisher=Routledge|year=2004|pages=173}}</ref> It was used to explain the causes of [[overurbanization]], a theory that urbanization rates outpaced industrial growth in several developing countries.<ref name=Shandra>{{Cite journal | doi=10.1525/sop.2003.46.3.309 |title = Environmental Degradation, Environmental Sustainability, and Overurbanization in the Developing World: A Quantitative, Cross-National Analysis|journal = Sociological Perspectives|volume = 46|issue = 3|pages = 309–329|year = 2003|last1 = Shandra|first1 = John M.|last2 = London|first2 = Bruce|last3 = Williamson|first3 = John B.|jstor=10.1525/sop.2003.46.3.309|s2cid = 144665267|url=https://www.researchgate.net/publication/249983991}}</ref>

The Latin American Structuralist and the American Marxist schools had significant differences but, according to economist Matias Vernengo, they agreed on some basic points:<blockquote>[B]oth groups would agree that at the core of the dependency relation between center and periphery lays [lies] the inability of the periphery to develop an autonomous and dynamic process of technological innovation. Technology <span role="presentation">–</span> the Promethean force unleashed by the [[Industrial Revolution]] <span>–</span> is at the center of stage. The Center countries controlled the technology and the systems for generating technology. Foreign [[Capital (economics)|capital]] could not solve the problem, since it only led to limited transmission of technology, but not the process of innovation itself. Baran and others frequently spoke of the [[international division of labour]] – skilled workers in the center; unskilled in the periphery – when discussing key features of dependency.<ref name=":2" /></blockquote>

Baran placed surplus extraction and [[capital accumulation]] at the center of his analysis. Development depends on a population's producing more than it needs for bare subsistence (a surplus). Further, some of that surplus must be used for capital accumulation – the purchase of new [[means of production]] – if development is to occur; spending the surplus on things like luxury consumption does not produce development. Baran noted two predominant kinds of economic activity in poor countries. In the older of the two, plantation agriculture, which originated in [[Colonialism|colonial times]], most of the surplus goes to the landowners, who use it to emulate the consumption patterns of wealthy people in the developed world; much of it thus goes to purchase foreign-produced luxury items –automobiles, clothes, etc. – and little is accumulated for investing in development. The more recent kind of economic activity in the periphery is industry—but of a particular kind. It is usually carried out by foreigners, although often in conjunction with local interests. It is often under special [[tariff]] protection or other government concessions. The surplus from this production mostly goes to two places: part of it is sent back to the foreign [[shareholder]]s as [[Profit (economics)|profit]]; the other part is spent on conspicuous consumption in a similar fashion to that of the plantation aristocracy. Again, little is used for development. Baran thought that political revolution was necessary to break this pattern.

In the 1960s, members of the Latin American Structuralist school argued that there is more latitude in the system than the Marxists believed. They argued that it allows for partial development or "dependent development"&ndash;development, but still under the control of outside decision makers. They cited the partly successful attempts at [[industrialisation]] in Latin America around that time (Argentina, Brazil, Mexico) as evidence for this hypothesis. They were led to the position that dependency is not a relation between commodity exporters and industrialised countries, but between countries with different degrees of industrialisation. In their approach, there is a distinction made between the economic and political spheres: economically, one may be developed or underdeveloped; but even if (somewhat) economically developed, one may be politically autonomous or dependent.<ref>{{harvnb|So|1990}}</ref>{{page needed|date=December 2019}} More recently, [[Guillermo O'Donnell]] has argued that constraints placed on development by [[neoliberalism]] were lifted by the military coups in Latin America that came to promote development in authoritarian guise (O'Donnell, 1982).<ref>O'Donnell, G. ''El Estado Burocrático Autoritario: Triunfos, Derrotas y Crisis'', Buenos Aires, Universidad de Belgrano, written 1982, published 1996, cited in {{harvnb|Vernengo|2004|p=10}}</ref>

These positions particularly in regard of Latin America were notably challenged theoretically in the work and teaching of [[Ruy Mauro Marini]] who developed wider recognition for a specifically Marxist Dependency Theory, after close reading of Marx, that [[super-exploitation]] and [[unequal exchange]] characteristically arose out of the specific forms in the capital reproduction of dependency, and the specific class relations particular to that dependency in the periphery .<ref>[[Ruy Mauro Marini|Marini, Ruy Mauro]] (2022) ''The Dialectics of Dependency'' Trans. and Introduction [[Amanda Latimer|Latimer, Amanda]] Monthly Review Press, New York.
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The importance of [[multinational corporation]]s and state promotion of technology were emphasised by the Latin American Structuralists.

Fajnzylber has made a distinction between systemic or authentic competitiveness, which is the ability to compete based on higher productivity, and spurious competitiveness, which is based on low wages.<ref>Cited in {{harvnb|Vernengo|2004|p=11}}</ref>

The [[Debt of developing countries|third-world debt]] crisis of the 1980s and continued stagnation in Africa and Latin America in the 1990s caused some doubt as to the feasibility or desirability of "dependent development".<ref>{{harvnb|Vernengo|2004|p= 12}}</ref>

The ''sine qua non'' of the dependency relationship is not the difference in technological sophistication, as traditional dependency theorists believe, but rather the difference in financial strength between core and peripheral countries&ndash;particularly the inability of peripheral countries to borrow in their own currency. He believes that the [[Hegemony|hegemonic]] position of the United States is very strong because of the importance of its financial markets and because it controls the international [[reserve currency]] &ndash; the [[United States dollar|US dollar]]. He believes that the end of the [[Bretton Woods system|Bretton Woods international financial agreements]] in the early 1970s considerably strengthened the United States' position because it removed some constraints on their financial actions.

"Standard" dependency theory differs from Marxism, in arguing against [[Internationalism (politics)|internationalism]] and any hope of progress in less developed nations towards industrialization and a liberating revolution. Theotonio dos Santos described a "new dependency", which focused on both the internal and external relations of less-developed countries of the periphery, derived from a Marxian analysis. Former Brazilian President [[Fernando Henrique Cardoso]] (in office 1995&ndash;2002) wrote extensively on dependency theory while in political exile during the 1960s, arguing that it was an approach to studying the economic disparities between the centre and periphery. Cardoso summarized his version of dependency theory as follows:
*there is a financial and technological penetration by the developed capitalist centers of the countries of the periphery and semi-periphery;
*this produces an unbalanced economic structure both within the peripheral societies and between them and the centers;
*this leads to limitations on self-sustained growth in the periphery;
*this favors the appearance of specific patterns of [[Social class|class]] relations;
*these require modifications in the role of the state to guarantee both the functioning of the economy and the political articulation of a society, which contains, within itself, foci of inarticulateness and structural imbalance.<ref>Cardoso & Faletto, 1979, cited in {{harvnb|Tausch|2003|ps=, about 1/6 of way through.}}</ref>

The analysis of development patterns in the 1990s and beyond is complicated by the fact that capitalism develops not smoothly, but with very strong and self-repeating ups and downs, called cycles. Relevant results are given in studies by Joshua Goldstein, Volker Bornschier, and Luigi Scandella.<ref name=":0" />

With the economic growth of India and some East Asian economies, dependency theory has lost some of its former influence. It still influences some [[NGO]] campaigns, such as [[Make Poverty History]] and the [[fair trade]] movement.