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Dependency

Dependency describes a process of economic development that is conditioned by external relations of domination. These relations are rooted in historical and ongoing processes of capitalist internationalization that concentrate economic and political power in the more developed countries. Developed countries actively perpetuate a state of dependency in less-developed countries through policies and initiatives that limit their developmental autonomy. They enforce these policies, sometimes by means of economic sanctions or military invasion and control, but mostly through the rules of international trade and commerce. The dependency perspective implies that the further internationalization of capital through globalization will reproduce structures of power that maintain and reproduce dependency and underdevelopment in the third world.

Dependency, Interdependence, and Dependence

Many people say that, as a result of the increasing internationalization or globalization of capital, the entire world is now economically tied together by complex webs of interdependence; consequently, and in virtually all states, the influence of international forces and factors on the operation of domestic economies has increased in importance relative to internal ones. However, dependency is neither similar to, or an outcome of interdependence, nor is it meant to describe a situation of external reliance, or dependence. These terms refer to interactions among well-integrated nation-states, whereas the outcome that dependency describes results from the interaction of less-developed, less-homogeneous states with well-integrated nation-states.

Because of their essential inequality, dominant states are able to determine the position of the less-developed countries in the global division of labor and to limit their developmental choices and autonomy, and thus their capacity for setting their own developmental course. This has produced a characteristic set of socioeconomic and political structures and patterns of change in the less-developed countries: dualism and monopoly; a lack of internal structural integration; dependency on outside capital, labor, and markets; inequality; cultural distortions; national disintegration; and formal but inauthentic democracy.

Dependency Theory and Underdevelopment

This notion of dependency is at the center of a body of research and writing on underdevelopment called dependency theory. The core ideas and themes of dependency theory were first elaborated by an economist, Raul Prebisch, who served as secretary-general of the UN Economic Commission for Latin America and the Caribbean (ECLAC) and was the founding secretary-general of the UN Conference on Trade and Development (UNCTAD). Prebisch attributed the persistence of third-world poverty to the operation of international capitalism. He argued that the capitalist world economy was characterized by a center-periphery relationship among nations, in which third-world nations were producers of raw materials for first-world manufacturers and consequently locked into a peripheral and dependent position in the world economy. Prebisch developed, in collaboration with the economist Hans Singer, the thesis that the terms of trade for primary products tend to deteriorate over time because the prices of manufactured goods bought by the periphery were rising faster than were the prices of raw materials, cash crops, and foodstuff sold by the periphery to the center. Consequently, the structure of trade ensured the persistence of dependency and created an unbalanced process of development. These arguments became the basis of what became known as dependency theory.

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