m Dependency theories gained traction for a brief

period of time in the late 60͛s ʹ mid 70͛s.
m They built on the STRUCTURALIST theories that had
preceded them by perceiving the World not only as
dualistic, but stagnant in its relations.
m ë
  Group of ͚Core͛ developed nations
were exploiting the ͚Periphery͛ developing nations.
There was a ͚cause͛ and ͚effect͛ relationship between
the two regions.
m Internal institutional problems were either played
down or portrayed as a legacy of colonialism.
       

m The theories gained traction with populist Governments due to portraying poor
conditions as the result of external factors. Culturally, the idea was given traction
by ?

who contended that the US had material gains but had d

  



  




 they were ͚

 ͛.

m 6conomically, the ͚Big Push͛ of the early ISI period (50͛s/60͛s) had d

  
 
d  
 dd [ there had only been moderate growth.

m The  


 d 
 
   noted that ISI had resulted
in

r xd
 
 
d  .

r Shortage of FX and increase in foreign debt.

r ¦ 
 
 

r Foreign ownership of the economy by TNCs.

m A contrary effect of ͚  
  
͛ (Myrdal) could be observed, where

backwash effects were compounding, rather than dissolving, dualism.

r Developing nations were using capital-intensive technologies as part of their

industrialisation[    
    
  
.
       

m Underlying conditions of dependency

r 
   , large import/GDP.

r    


d

and in d 
  

r ‰ 
 


  the financial and industrial

sector.

m Structural results of dependency

r Income, employment and growth determined by
 
  
,  d
 by transnational
corporations (TNCs).

r Income, employment and growth conditioned by

 
d 
 
and changes in prices of imports.

r  d
  

  


r   


 
 


 .

       

m Although Dependency Theory was a ͚  d ͛ (Kay, 1989) due to the  d


 
d, theories tended to consider four channels through which
dependency was propagated

I. Asymmetric Trade Relations

r There was 
 
 



 d  , where developed countries

produce high-value manufactures that could be consumed by the peripheral
͚elite 
  
  


  
    
 





II. TNCs

r 


  d
, used
  



 

,




 d 

 

via minimal backwards and forwards linkages
and human capital development.

III. International Banking

r ¦ 

  d 

 (reducing ability to import foreign capital),
acted as a d 
 



.

IV. Drugs Trade

r  

domestically, as well  
  

 (see

Colombia), 
 
.
       

m Dependency theorists took a 



 
of the dire state of developing
countries.

m An example is ?.

r Baran argued that the key to growth was the proper use of ͚6conomic Surplus͛
 
 d d 

 d 
 

 



r TNCs and foreign powers used the four channels noted prior to extract that
surplus, preventing it from being used to aid development.

r The roots of this surplus exploitation went back to the


 
  


 
[ extractive institutions aimed at benefiting the mainland
and a few elite.

r In turn, the new elite (TNCs)aimed to harvest and repatriate the economic
surplus for themselves, and prevent economic development due to

 
 


 
  d 

  d
 d  


 ‰    

 
 

 




r Thus, foreign capital diminished the potential for economic development.

       

m
 
considers the effect of inherited institutions on

development .

r Notes that M
 likens the Latin American (Latam) institutions to

͚Hedgehogs͛ ud

   

d  
 

d
[ characterised by the  d  
).

r Yet, likens 6uropean + N.A institutions to ͚Foxes͛ ( 




  [
characterised by the 

 
).

r Also argues that Iberian colonialists wanted to establish an ͚
 d

 ͛ but 6ngland wanted an 
 d ͛ (although 6nglish
colonies lacked the resource intensities of Iberian ones anyway).

m 6dwards also noted that the a    

   
in
Latam (
 

   ), had an  
 
   (from
attempting to exploit Latam, to trying to develop it ʹ Alliance of Progress ʹ
and ignoring it).

m The US was thus perceived  
  

d


[ also Americans were hostile to the US being perceived to claim the
title ͚America͛ ʹ they are all Americans.
       

m Dependency theory began to fall out of favour
 

for a
range of reasons

r It had a 
  
 ͞Dependent countries lack the capacity for
economic growth and they lack this because their structures are
dependent ones.͟

r It is



, such that there are little useful policy proposals
outside of autarky.

r It


   
 


  x
was booming ͚despite͛
close integration into the World 6conomy.

r    
d 
   

  

 

[ the creation of NAFTA, the attempt at the ͚Alliance for
Progress͛ with the US.

r  
 
 
 
[ with little coherency between
different theories of dependency, there was no comprehensive,
alternative, strategy for growth.

r The d
 d


 
[ Dependency theory was

closely allied with Marxism.
       

m Dependency theory thus     

d 


 

 
of the ͚periphery͛ and ͚core͛.

m  
 made a compelling argument that one should not view the

peripheral nations as powerless to shape their destiny. He saw 3 broad stages
of development having occurred in Latam

r   
 
  . Blatant dualism.

r  ¦¦ 
. Developmentalist alliance between industrial workers,

government, the elite and the agro-export sector.

r ?
 d  
 
   

. Drastic curbs on democracy,

dismantled infant welfare state, the central importance of TNCs.

m The nature of dependency was therefore variable over time.

m Cardoso believed    

  




  
  
d d
d
, preventing a purely extractive
relationship.
       

m wther theorists began to deconstruct dependent states, noting the crippling

generality of the dependency movement.

m   distinguished an intermediate state, located between d 





 (that appeared to be unable to autonomously determine their
own path) and

 






.

r  

 is a special instance of dependency, characterised

by the association or alliance of international and local capital.

r Dependent development nations were on the periphery,   
 

 

 (which contradicts traditional dependency
theorists).

r 6xamples Mexico, Brazil.

m However, these countries on the ͚semi-periphery͛ suffer

 



, underutilization and  
 
 d  , 
 
and 
 

  
.

m Growth was possible, 
 
 

 


  
d 

       

m With the 
 d
  
 
, a new dependency movement has been

called into action.

m 
 makes two claims

r That Washington-based international organisations and financial institutions keep

the periphery in check by imposing strict conditions on loans, which means the
economic surplus accumulated by a developing nation is extracted by Western
powers.

r The new dependency associated with globalization is presented as interdependence

in order to obfuscate the asymmetries in the new order.

m
however, has a rebuttal

r Admits that globalization means that a country   
   

 
  , and that other countries͛ political/economic upheaval

 


 

r But,   

 
  than just being determined by

external factors.

r A  
   
d 


[ diversify exports and prop up domestic
savings.

r Integration into the global 



  




, but




 d


 

  

  .