VincentFerraro,"DependencyTheory:An

Introduction,"inTheDevelopmentEconomics
Reader,ed.GiorgioSecondi(London:Routledge,
2008),pp.5864
Background
DependencyTheorydevelopedinthelate1950sunderthe
guidanceoftheDirectoroftheUnitedNationsEconomic
CommissionforLatinAmerica,RaulPrebisch.Prebischandhis
colleaguesweretroubledbythefactthateconomicgrowthinthe
advancedindustrializedcountriesdidnotnecessarilyleadto
growthinthepoorercountries.Indeed,theirstudiessuggested
thateconomicactivityintherichercountriesoftenledtoserious
economicproblemsinthepoorercountries.Suchapossibility
wasnotpredictedbyneoclassicaltheory,whichhadassumed
thateconomicgrowthwasbeneficialtoall(Paretooptimal)even
ifthebenefitswerenotalwaysequallyshared.
Prebisch'sinitialexplanationforthephenomenonwasvery
straightforward:poorcountriesexportedprimarycommodities
totherichcountrieswhothenmanufacturedproductsoutof
thosecommoditiesandsoldthembacktothepoorercountries.
The"ValueAdded"bymanufacturingausableproductalways
costmorethantheprimaryproductsusedtocreatethose
products.Therefore,poorercountrieswouldneverbeearning
enoughfromtheirexportearningstopayfortheirimports.
Prebisch'ssolutionwassimilarlystraightforward:poorer
countriesshouldembarkonprogramsofimportsubstitutionso
thattheyneednotpurchasethemanufacturedproductsfromthe
richercountries.Thepoorercountrieswouldstillselltheir
primaryproductsontheworldmarket,buttheirforeign
exchangereserveswouldnotbeusedtopurchasetheir
manufacturesfromabroad.
Threeissuesmadethispolicydifficulttofollow.Thefirstisthat
theinternalmarketsofthepoorercountrieswerenotlarge

enoughtosupporttheeconomiesofscaleusedbythericher
countriestokeeptheirpriceslow.Thesecondissueconcerned
thepoliticalwillofthepoorercountriesastowhethera
transformationfrombeingprimaryproductsproducerswas
possibleordesirable.Thefinalissuerevolvedaroundtheextent
towhichthepoorercountriesactuallyhadcontroloftheir
primaryproducts,particularlyintheareaofsellingthose
productsabroad.Theseobstaclestotheimportsubstitution
policyledotherstothinkalittlemorecreativelyandhistorically
attherelationshipbetweenrichandpoorcountries.
Atthispointdependencytheorywasviewedasapossibleway
ofexplainingthepersistentpovertyofthepoorercountries.The
traditionalneoclassicalapproachsaidvirtuallynothingonthis
questionexcepttoassertthatthepoorercountrieswerelatein
comingtosolideconomicpracticesandthatassoonasthey
learnedthetechniquesofmoderneconomics,thenthepoverty
wouldbegintosubside.However,Marxiststheoristsviewedthe
persistentpovertyasaconsequenceofcapitalistexploitation.
Andanewbodyofthought,calledtheworldsystemsapproach,
arguedthatthepovertywasadirectconsequenceofthe
evolutionoftheinternationalpoliticaleconomyintoafairly
rigiddivisionoflaborwhichfavoredtherichandpenalizedthe
poor.
HowCanOneDefineDependencyTheory?
Thedebatesamongtheliberalreformers(Prebisch),the
Marxists(AndreGunderFrank),andtheworldsystemstheorists
(Wallerstein)wasvigorousandintellectuallyquitechallenging.
Therearestillpointsofseriousdisagreementsamongthe
variousstrainsofdependencytheoristsanditisamistaketo
thinkthatthereisonlyoneunifiedtheoryofdependency.
Nonetheless,therearesomecorepropositionswhichseemto
underlietheanalysesofmostdependencytheorists.
Dependencycanbedefinedasanexplanationoftheeconomic
developmentofastateintermsoftheexternalinfluences
political,economic,andculturalonnationaldevelopment
policies(OsvaldoSunkel,"NationalDevelopmentPolicyandExternal

DependenceinLatinAmerica,"TheJournalofDevelopmentStudies,Vol.6,
no.1,October1969,p.23).TheotonioDosSantosemphasizesthe

historicaldimensionofthedependencyrelationshipsinhis
definition:
[Dependencyis]...anhistoricalconditionwhichshapesacertain
structureoftheworldeconomysuchthatitfavorssome
countriestothedetrimentofothersandlimitsthedevelopment
possibilitiesofthesubordinateeconomics...asituationinwhich
theeconomyofacertaingroupofcountriesisconditionedby
thedevelopmentandexpansionofanothereconomy,towhich
theirownissubjected.

(TheotonioDosSantos,"TheStructureofDependence,"inK.T.Fannand
DonaldC.Hodges,eds.,ReadingsinU.S.Imperialism.Boston:PorterSargent,
1971,p.226)

Therearethreecommonfeaturestothesedefinitionswhich
mostdependencytheoristsshare.First,dependency
characterizestheinternationalsystemascomprisedoftwosets
ofstates,variouslydescribedasdominant/dependent,
center/peripheryormetropolitan/satellite.Thedominantstates
aretheadvancedindustiralnationsintheOrganizationof
EconomicCooperationandDevelopment(OECD).The
dependentstatesarethosestatesofLatinAmerica,Asia,and
AfricawhichhavelowpercapitaGNPsandwhichrelyheavily
ontheexportofasinglecommodityforforeignexchange
earnings.
Second,bothdefinitionshaveincommontheassumptionthat
externalforcesareofsingularimportancetotheeconomic
activitieswithinthedependentstates.Theseexternalforces
includemultinationalcorporations,internationalcommodity
markets,foreignassistance,communications,andanyother
meansbywhichtheadvancedindustrializedcountriescan
representtheireconomicinterestsabroad.
Third,thedefinitionsofdependencyallindicatethatthe
relationsbetweendominantanddependentstatesaredynamic
becausetheinteractionsbetweenthetwosetsofstatestendto
notonlyreinforcebutalsointensifytheunequalpatterns.

Moreover,dependencyisaverydeepseatedhistoricalprocess,
rootedintheinternationalizationofcapitalism.Dependencyis
anongoingprocess:
LatinAmericaistoday,andhasbeensincethesixteenth
century,partofaninternationalsystemdominatedbythenow
developednations....Latinunderdevelopmentistheoutcomeof
aparticularseriesofrelationshipstotheinternationalsystem.
SusanneBodenheimer,"DependencyandImperialism:TheRootsofLatin
AmericanUnderdevelopment,"inFannandHodges,Readings,op.cit.,p.157.

Inshort,dependencytheoryattemptstoexplainthepresent
underdevelopedstateofmanynationsintheworldby
examiningthepatternsofinteractionsamongnationsandby
arguingthatinequalityamongnationsisanintrinsicpartof
thoseinteractions.
TheStructuralContextofDependency:IsitCapitalismoris
itPower?
Mostdependencytheoristsregardinternationalcapitalismasthe
motiveforcebehinddependencyrelationships.AndreGunder
Frank,oneoftheearliestdependencytheorists,isquiteclearon
thispoint:
...historicalresearchdemonstratesthatcontemporary
underdevelopmentisinlargepartthehistoricalproductofpast
andcontinuingeonomicandotherrelationsbetweenthesatellite
underdevelopedandthenowdevelopedmetropolitancountries.
Furthermore,theserelationsareanessentialpartofthecapitalist
systemonaworldscaleasawhole.
AndreGunderFrank,"TheDevelopmentofUnderdevelopment,"inJamesD.
Cockcroft,AndreGunderFrank,andDaleJohnson,eds.,Dependenceand
Underdevelopment.GardenCity,NewYork:AnchorBooks,1972,p.3.

Accordingtothisview,thecapitalistsystemhasenforcedarigid
internationaldivisionoflaborwhichisresponsibleforthe
underdevelopmentofmanyareasoftheworld.Thedependent
statessupplycheapminerals,agriculturalcommodities,and
cheaplabor,andalsoserveastherepositoriesofsurpluscapital,
obsolescenttechnologies,andmanufacturedgoods.These
functionsorienttheeconomiesofthedependentstatestoward

theoutside:money,goods,andservicesdoflowintodependent
states,buttheallocationoftheseresourcesaredeterminedby
theeconomicinterestsofthedominantstates,andnotbythe
economicinterestsofthedependentstate.Thisdivisionoflabor
isultimatelytheexplanationforpovertyandthereislittle
questionbutthatcapitalismregardsthedivisionoflaborasa
necessaryconditionfortheefficientallocationofresources.The
mostexplicitmanifestationofthischaracteristicisinthe
doctrineofcomparativeadvantage.
Moreover,toalargeextentthedependencymodelsrestuponthe
assumptionthateconomicandpoliticalpowerareheavily
concentratedandcentralizedintheindustrializedcountries,an
assumptionsharedwithMarxisttheoriesofimperialism.Ifthis
assumptionisvalid,thenanydistinctionbetweeneconomicand
politicalpowerisspurious:governmentswilltakewhatever
stepsarenecessarytoprotectprivateeconomicinterests,suchas
thoseheldbymultinationalcorporations.
Notalldependencytheorists,however,areMarxistandone
shouldclearlydistinguishbetweendependencyandatheoryof
imperialism.TheMarxisttheoryofimperialismexplains
dominantstateexpansionwhilethedependencytheoryexplains
underdevelopment.Statedanotherway,Marxisttheoriesexplain
thereasonswhyimperialismoccurs,whiledependencytheories
explaintheconsequencesofimperialism.Thedifferenceis
significant.Inmanyrespects,imperialismis,foraMarxist,part
oftheprocessbywhichtheworldistransformedandis
thereforeaprocesswhichacceleratesthecommunistrevolution.
MarxspokeapprovinglyofBritishcolonialisminIndia:
EnglandhastofulfiladoublemissioninIndia:onedestructive,
theotherregeneratingtheannihilationofoldAsiaticsociety,
andthelayingofthematerialfoundationsofWesternsocietyin
Asia.
KarlMarx,"TheFutureResultsoftheBritishRuleinIndia,"NewYorkDaily
Tribune,No.3840,August8,1853.

Forthedependencytheorists,underdevelopmentisawholly
negativeconditionwhichoffersnopossibilityofsustainedand

autonomouseconomicactivityinadependentstate.
Additionally,theMarxisttheoryofimperialismisself
liquidating,whilethedependentrelationshipisself
perpetuating.TheendofimperialismintheLeninistframework
comesaboutasthedominantpowersgotowaroverarapidly
shrinkingnumberofexploitableopportunities.WorldWarI
was,forLenin,theclassicproofofthisproposition.Afterthe
warwasover,BritainandFrancetookovertheformerGerman
colonies.Adependencytheoristrejectsthisproposition.A
dependentrelationshipexistsirrespectiveofthespecificidentity
ofthedominantstate.Thatthedominantstatesmayfightover
thedispositionofdependentterritoriesisnotinandofitselfa
pertinentbitofinformation(exceptthatperiodsoffighting
amongdominantstatesaffordsopportunitiesforthedependent
statestobreaktheirdependentrelationships).Toadependency
theorist,thecentralcharacteristicoftheglobaleconomyisthe
persistenceofpovertythroughouttheentiremodernperiodin
virtuallythesameareasoftheworld,regardlessofwhatstate
wasincontrol.
Finally,therearesomedependencytheoristswhodonotidentify
capitalismasthemotorforcebehindadependentrelationship.
Therelationshipismaintainedbyasystemofpowerfirstandit
doesnotseemasifpowerisonlysupportedbycapitalism.For
example,therelationshipbetweentheformerdependentstates
inthesocialistbloc(theEasternEuropeanstatesandCuba,for
example)closelyparalleledtherelationshipsbetweenpoor
statesandtheadvancedcapitaliststates.Thepossibilitythat
dependencyismorecloselylinkedtodisparitiesofpowerrather
thantotheparticularcharacteristicsofagiveneconomicsystem
isintriguingandconsistentwiththemoretraditionalanalysesof
internationalrelations,suchasrealism.
TheCentralPropositionsofDependencyTheory
Thereareanumberofpropositions,allofwhicharecontestable,
whichformthecoreofdependencytheory.Thesepropositions
include:
1.Underdevelopmentisaconditionfundamentallydifferent

fromundevelopment.Thelattertermsimplyreferstoacondition
inwhichresourcesarenotbeingused.Forexample,the
EuropeancolonistsviewedtheNorthAmericancontinentasan
undevelopedarea:thelandwasnotactivelycultivatedonascale
consistentwithitspotential.Underdevelopmentreferstoa
situationinwhichresourcesarebeingactivelyused,butusedin
awaywhichbenefitsdominantstatesandnotthepoorerstates
inwhichtheresourcesarefound.
2.Thedistinctionbetweenunderdevelopmentand
undevelopmentplacesthepoorercountriesoftheworldisa
profoundlydifferenthistoricalcontext.Thesecountriesarenot
"behind"or"catchingup"totherichercountriesoftheworld.
Theyarenotpoorbecausetheylaggedbehindthescientific
transformationsortheEnlightenmentvaluesoftheEuropean
states.Theyarepoorbecausetheywerecoercivelyintegrated
intotheEuropeaneconomicsystemonlyasproducersofraw
materialsortoserveasrepositoriesofcheaplabor,andwere
deniedtheopportunitytomarkettheirresourcesinanywaythat
competedwithdominantstates.
3.Dependencytheorysuggeststhatalternativeusesofresources
arepreferabletotheresourceusagepatternsimposedby
dominantstates.Thereisnocleardefinitionofwhatthese
preferredpatternsmightbe,butsomecriteriaareinvoked.For
example,oneofthedominantstatepracticesmostoften
criticizedbydependencytheoristsisexportagriculture.The
criticismisthatmanypooreconomiesexperienceratherhigh
ratesofmalnutritioneventhoughtheyproducegreatamountsof
foodforexport.Manydependencytheoristswouldarguethat
thoseagriculturallandsshouldbeusedfordomesticfood
productioninordertoreducetheratesofmalnutrition.
4.Theprecedingpropositioncanbeamplified:dependency
theoristsrelyuponabeliefthatthereexistsaclear"national"
economicinterestwhichcanandshouldbearticulatedforeach
country.Inthisrespect,dependencytheoryactuallysharesa
similartheoreticalconcernwithrealism.Whatdistinguishesthe
dependencyperspectiveisthatitsproponentsbelievethatthis

nationalinterestcanonlybesatisfiedbyaddressingtheneedsof
thepoorwithinasociety,ratherthanthroughthesatisfactionof
corporateorgovernmentalneeds.Tryingtodeterminewhatis
"best"forthepoorisadifficultanalyticalproblemoverthelong
run.Dependencytheoristshavenotyetarticulatedan
operationaldefinitionofthenationaleconomicinterest.
5.Thediversionofresourcesovertime(andonemustremember
thatdependentrelationshipshavepersistedsincetheEuropean
expansionbeginninginthefifteenthcentury)ismaintainednot
onlybythepowerofdominantstates,butalsothroughthe
powerofelitesinthedependentstates.Dependencytheorists
arguethattheseelitesmaintainadependentrelationshipbecause
theirownprivateinterestscoincidewiththeinterestsofthe
dominantstates.Theseelitesaretypicallytrainedinthe
dominantstatesandsharesimilarvaluesandculturewiththe
elitesindominantstates.Thus,inaveryrealsense,a
dependencyrelationshipisa"voluntary"relationship.Oneneed
notarguethattheelitesinadependentstateareconsciously
betrayingtheinterestsoftheirpoor;theelitessincerelybelieve
thatthekeytoeconomicdevelopmentliesinfollowingthe
prescriptionsofliberaleconomicdoctrine.
ThePolicyImplicationsofDependencyAnalysis
Ifoneacceptstheanalysisofdependencytheory,thenthe
questionsofhowpooreconomiesdevelopbecomequite
differentfromthetraditionalquestionsconcerningcomparative
advantage,capitalaccumulation,andimport/exportstrategies.
Someofthemostimportantnewissuesinclude:
1.Thesuccessoftheadvancedindustrialeconomiesdoesnot
serveasamodelforthecurrentlydevelopingeconomies.When
economicdevelopmentbecameafocusedareaofstudy,the
analyticalstrategy(andideologicalpreference)wasquiteclear:
allnationsneedtoemulatethepatternsusedbytherich
countries.Indeed,inthe1950sand1960stherewasa
paradigmaticconsensusthatgrowthstrategieswereuniversally
applicable,aconsensusbestarticulatedbyWaltRostowinhis
book,TheStagesofEconomicGrowth.Dependencytheory

suggeststhatthesuccessoftherichercountrieswasahighly
contingentandspecificepisodeinglobaleconomichistory,one
dominatedbythehighlyexploitativecolonialrelationshipsof
theEuropeanpowers.Arepeatofthoserelationshipsisnotnow
highlylikelyforthepoorcountriesoftheworld.
2.Dependencytheoryrepudiatesthecentraldistributive
mechanismoftheneoclassicalmodel,whatisusuallycalled
"trickledown"economics.Theneoclassicalmodelofeconomic
growthpaysrelativelylittleattentiontothequestionof
distributionofwealth.Itsprimaryconcernisonefficient
productionandassumesthatthemarketwillallocatetherewards
ofefficientproductioninarationalandunbiasedmanner.This
assumptionmaybevalidforawellintegrated,economically
fluideconomywherepeoplecanquicklyadjusttoeconomic
changesandwhereconsumptionpatternsarenotdistortedby
noneconomicforcessuchasracial,ethnic,orgenderbias.
Theseconditionsarenotpervasiveinthedevelopingeconomies,
anddependencytheoristsarguethateconomicactivityisnot
easilydisseminatedinpooreconomies.Forthesestructural
reasons,dependencytheoristsarguethatthemarketaloneisnot
asufficientdistributivemechanism.
3.Sincethemarketonlyrewardsproductivity,dependency
theoristsdiscountaggregatemeasuresofeconomicgrowthsuch
astheGDPortradeindices.Dependencytheoristsdonotdeny
thateconomicactivityoccurswithinadependentstate.Theydo
makeaveryimportantdistinction,however,betweeneconomic
growthandeconomicdevelopment.Forexample,thereisa
greaterconcernwithinthedependencyframeworkforwhether
theeconomicactivityisactuallybenefittingthenationasa
whole.Therefore,fargreaterattentionispaidtoindicessuchas
lifeexpectancy,literacy,infantmortality,education,andthe
like.Dependencytheoristsclearlyemphasizesocialindicators
farmorethaneconomicindicators.
4.Dependentstates,therefore,shouldattempttopursuepolicies
ofselfreliance.Contrarytotheneoclassicalmodelsendorsed
bytheInternationalMonetaryFundandtheWorldBank,greater

integrationintotheglobaleconomyisnotnecessarilyagood
choiceforpoorcountries.Oftenthispolicyperspectiveis
viewedasanendorsementofapolicyofautarky,andtherehave
beensomeexperimentswithsuchapolicysuchasChina'sGreat
LeapForwardorTanzania'spolicyofUjamaa.Thefailuresof
thesepoliciesareclear,andthefailuressuggestthatautarkyis
notagoodchoice.Ratherapolicyofselfrelianceshouldbe
interpretedasendorsingapolicyofcontrolledinteractionswith
theworldeconomy:pporcountriesshouldonlyendorse
interactionsontermsthatpromisetoimprovethesocialand
economicwelfareofthelargercitizenry.