Model Answer
0 min readIntroduction
Dependency Theory emerged in the 1960s as a critique of mainstream development economics, which largely followed a linear path modeled on the experiences of developed nations. It posits that the poverty and underdevelopment of the ‘periphery’ (Africa, Latin America, Asia) are not due to internal factors, but are a direct consequence of their historical and ongoing exploitation by the ‘core’ (developed nations). This exploitation occurs through unequal trade relations, foreign investment, and political dominance. The theory gained prominence amidst decolonization and the perceived failure of modernization theory to address the persistent inequalities between nations. This answer will assess the robustness of this critique in the context of Africa and Latin America.
Core Tenets of Dependency Theory
Dependency Theory, pioneered by scholars like Raul Prebisch, Andre Gunder Frank, and Samir Amin, rests on several key arguments:
- Unequal Exchange: The terms of trade consistently favor developed countries, leading to a transfer of surplus from the periphery to the core. Prebisch’s work highlighted the declining terms of trade for primary commodity exporters.
- Centre-Periphery Relationship: The global economic system is structured around a core-periphery relationship, where the core benefits from the periphery’s resources and labor.
- Monopolistic Capitalism: Transnational corporations (TNCs) from the core dominate the economies of the periphery, extracting profits and hindering local development.
- Development of Underdevelopment: Underdevelopment isn’t a stage before development, but a product of the global capitalist system itself.
Application to Africa
Africa’s development experience largely aligns with Dependency Theory’s predictions. Colonialism established extractive economic structures focused on exporting raw materials (cocoa, coffee, minerals) to Europe. Post-independence, many African nations remained reliant on these exports, vulnerable to price fluctuations and subject to neo-colonial control through debt and conditional aid.
For example, the Democratic Republic of Congo, rich in cobalt (essential for batteries), continues to face challenges related to resource curse, with much of the wealth accruing to foreign corporations and political elites, rather than benefiting the local population. Similarly, reliance on oil in Nigeria has led to Dutch Disease, hindering diversification and sustainable development. The continent’s high debt burden, often tied to structural adjustment programs imposed by the IMF and World Bank, further perpetuates dependency.
Application to Latin America
Latin America’s historical experience also supports Dependency Theory. The region’s integration into the global economy as a supplier of raw materials and agricultural products during the colonial era established a pattern of dependency. The dominance of US corporations in sectors like mining, agriculture (United Fruit Company in Central America), and finance has historically limited local industrialization and economic autonomy.
The debt crisis of the 1980s, triggered by rising interest rates in the US, devastated Latin American economies and forced them to adopt neoliberal policies that further opened their markets to foreign investment and reduced state intervention. While some countries like Brazil and Mexico have achieved industrialization, they remain vulnerable to external shocks and heavily reliant on exports to developed countries.
Critiques and Limitations
Despite its insights, Dependency Theory has faced several critiques:
- Oversimplification: It often presents a deterministic view of development, neglecting the role of internal factors like governance, corruption, and political instability.
- East Asian Tigers: The success of East Asian economies (South Korea, Taiwan, Singapore) – which followed export-oriented growth strategies but achieved significant development – challenges the theory’s claim that integration into the global economy inevitably leads to dependency.
- State Agency: It underestimates the agency of developing countries to pursue independent development strategies.
- Globalization & New Actors: The rise of new economic powers like China and India has altered the global landscape, creating new opportunities and challenges for Africa and Latin America that are not fully captured by the traditional Dependency Theory framework.
Furthermore, the theory doesn’t adequately explain intra-regional dependencies – for example, the growing economic influence of Brazil within South America.
Conclusion
Dependency Theory offers a valuable, though not entirely comprehensive, critique of the mainstream development process in Africa and Latin America. It correctly identifies the historical roots of underdevelopment in colonial exploitation and the ongoing structural inequalities of the global economic system. However, its deterministic nature and failure to account for internal factors and evolving global dynamics limit its explanatory power. A more nuanced understanding of development requires integrating insights from Dependency Theory with other perspectives, recognizing the complex interplay of internal and external forces shaping the development trajectories of these regions.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.