Dependency Development

Introduction

Dependency development is an area of dependency theory which is  mainly concerned with the efforts made to export primary resources from countries which are resource-rich but industry-poor. In this articles, we shall look at selected theories that emerged within the Neo-Marxist tradition. But before that it may be useful briefly to refer to the empirical background to the criticism raised against the original mainstream theories within both traditions.

Economic Situation in Developing Countries

First, it should be mentioned that the cumulated knowledge about the economic situation in the less developed countries had uncovered such a complex and multifaceted picture that it had become increasingly difficult to use the somewhat simplified conceptual framework and analytical models. In particular, it had proved impossible to conceive of the Third World as a large group of countries with uniform economic structures, development conditions and potentials. This applied where these countries were described as underdeveloped, as dual economies, as satellites, or as peripheral societies.

Next, it should be stressed that actual changes in the less developed countries in general implied greater and greater differentiation, accentuation of existing, and emergence of new, differences between the developing countries. To illustrate, they reacted and had to react in very dissimilar ways so the so-called oil crisis in 1973 and 1979, just as they reacted very differently to the continued stagnation in the world economy at the beginning of the 1980s. Because of this process of differentiation, it became increasingly inadequate to treat the Third World as a homogenous group of countries.

One of the few common traits that persisted was that economic progress almost everywhere remained limited to small geographic enclaves, to certain narrowly limited sectors, and so small prosperous social groups. The phenomenon has been characterized as `Singaporisation’, after the city state of Singapore, which, although surrounded by backward and poor areas, experienced unusual economic progress as early as the 1960s and 1970s.

However, even a common feature like ‘Singaporisation’ created problems for the classical theories, because it signified general tendencies very different from those envisaged in the theories. ‘Singaporisation’ corresponded poorly with the expectations of the modernization theories. It was contrary to these theories that development and modernization could be encapsulated and distorted to such a degree. Neither did this fit with the experiences garnered from the industrialised countries.

Limitations of the  classical  Dependency Theory

At the same time, the classical dependency theories were unable to explain the extensive industrial development which in fact occurred in many Third world countries. They faced particular problems when trying to understand and explain why, in countries like South Korea and Taiwan, even relatively close links had been forged between agriculture industry, and between the various industrial sectors.

This was in direct contradiction to the main thesis on the obstructing and blocking impact on close association with the world market and the rich countries: South Korea and Taiwan were among those countries most closely liked to the global capitalist structures and the centres of accumulation in the highly industrial countries.

These and many other factors prompted many development researchers and people who were actively engaged in development work to start looking seriously for other theories and strategies. The relatively closed theories, which at the same time treated the developing countries as a homogenous group had had their day. In their place appeared a number of more open theories which also, in a systematic manner, took into account the differences between the many countries of the Third World.

Many of these theories focused on specific aspects of reality, special development problems, and selected factors. One example could be proposition regarding the role of transnational companies in Latin American countries; another could be natural resource management in Western Africa and its impact upon economic performance.

The new wave of theories appeared partly as a criticism of the classical dependency theories; others took their point of departure in the modernization theories, but elaborated these considerably further, several of the new theories had little or more intellectual relationship or affinity with either or these two earlier schools of thought.

The Brazilian social scientist, F.H. Cardoso, was one of those who took his starting point in the original Latin American dependency theories (Cardoso and Faletto, 1979). However, he rejected the notion that peripheral countries could be treated as one group of dependence economies. In addition, he rebutted the idea that the world market and other external factors should be seen as more important than intra-societal conditions and forces, as some of these theories had asserted. Cardoso claimed instead that the external factors would have very different impacts, depending on the dissimilar internal conditions.

So decisive were the internal conditions, according to-Cardoso, that he would not rule out the possibility of extensive capitalist development in some dependent economies. Indeed, he did observe, in his own thorough analyses of Brazil that significant capitalist growth had occurred, though without creating auto centric reproduction and followed by marginalization of large segments of the population. When Cardoso referred to internal conditions, attention was drawn not only to economic structures but also to the social classes, t4ie distribution of power in the society, and the role of the state. His analyses thus reflected systematic’ attempts at combining economics and political science.

In contrast to Frank Cardoso regarded the national bourgeoisies of the dependence societies as potentially powerful and capable of shaping development. These classes could be so weak that they functioned merely as an extended arm of imperialism. But the national business community and its leaders, under other circumstances, as in the case of Brazil — act so autonornous/ and effectively that national, long-term interests were taken into account and embodied in the strategies pursued by the state.

The kind of development and societal transformation that could be brought about in even the most successful peripheral societies did not col respond to the development pattern in the centre countries. The result was not auto centric reproduction, but rather development in dependency (as opposed to Frank’s development of dependency). Or as Cardoso himself characterized it: dependent, associated development — that is development dependent on, and linked to, the world market and the centre economies.

In the further characterization of dependent development, Cardoso used, to a large extent concepts and formulations that resembled those of Amin. He thus emphasized the unbalanced and distorted production structure with its greatly over-enlarged sector manufacturing luxury goods exclusively for the benefit of the bourgeoisie and the middle class. Moreover, he high=lighted the absence of a sector that produced capital goods and the resulting dependency on machinery and equipment imports from the centre countries. But in contrast to Amin, Cardoso was very careful about generating. He would rather talk specifically about Brazil than about the peripheral countries in general.

In a similar way, Cardoso was reluctant to recommend general strategies, for a large number of dependent countries. Regarding Brazil, he pointed to a democratic form of regime as the most important precondition for turning societal development in a direction which would benefit the great majority of the people. Socialism was not on the agenda, and introducing it was in any case not as unproblematic as claimed by Frank and Amin.

Parallel to Cardoso’s efforts to adjust the classical dependency theories to the more! complex reality of Brazil, a number of German development researchers, under the leadership of Dieter Senghass and Ulrich Menzel, carried out a series of extensive historical studies of both centre and peripheral societies. The result was systematic and elaborate differentiation within both categories of counties. Their point was that when the centre countries were subjected to closer investigation, it turned out that they too, like the peripheral societies, revealed very different individualized structures and patterns of transformation. There were great differences for instance, between the Nordic and France or Germany.

Based on their historical studies Senghass and Menzel arrived at dissolution of the dichotomy between centre and periphery. In its place they put a number of patterns of integration into the world economy and the resulting development trajectories.

In addition, they reached the conclusion that the international conditions by themselves could not explain why a given society managed, or did not manage, so break out of the dependency trap. Far more important were the internal socio-economic conditions and political institutions in determining whether the economy in a given country could be transformed from a dependent export economy to an auto centric, nationally integrated economy.

From a number of country studies Senghass and Menzel extracted a list of conditions which, in Europe at least, could explain the occurrence or auto centric development. The important socio-economic variables included a relatively egalitarian distribution of land and incomes; a high level of literacy; and economic policies and institutions that supported industrialization and industrial interests. The political variables included extensive mobilization of farmers and workers; effective democratization to weaken the old elites; and partnership between the bureaucracy, industrial interests and the new social movements.

Senghass and Menzel, when they initiated their ambitious research programme, essentially wanted to find out how much could be learned from the over a century and a half of European experiences that would be of relevance to understanding the basic preconditions for the transformation of dependent, peripheral economies into auto centric economies.

There is little doubt that they have produced highly adequate documentation concerning he intra societal conditions, but here is also little doubt that their approach can be further enriched by more systematically taking into consideration the basic changes in the world capitalist system which have impacted heavily upon contemporary centre, periphery relationships.