Dependency Theory in International Relations

Dependency theory is a school of thought that explains underdevelopment as the result of the processes by which poor countries and regions are incorporated into the capitalist world economy. Emerging in Latin American writing during the 1960s as a response to concerns about inequalities in economic power both between and within [Page 173]nations, dependency theory claims that features of the global capitalist economy produce a metropolitan-periphery system of unequal relations between developed and underdeveloped states. Theorists also claim that such inequalities condition the social formations and political processes internal to underdeveloped states. According to this account, the economic preponderance of metropolitan capitalist states creates structural asymmetries in power over peripheral societies, limits the sovereignty of dependent states, and conditions their social structures in line with global capitalist imperatives.

Starting from the Marxian premise that capitalism is an expanding global system in which national economies constitute subsystems, dependency writers emphasize the importance of the process by which the developing world was brought into this system by European capitalist powers. In this process, colonial relations based on economic extraction and penetration by foreign capital established a set of metropole-periphery relations. These relations are seen as creating a pattern of dependency in the international system, in which metropolitan predominance in processes of technology, capital, and commerce ensures that development of peripheral states is conditioned by, and occurs as a reflection of, the development and expansion of capitalist metropoles. Both development and underdevelopment are therefore seen as processes simultaneously constituted by global capitalism. This dependence is seen not merely as an external economic condition, but as a political phenomenon encompassing the entire institutional framework embodied in the economic, social, political, and cultural formations of the periphery.

The international economic relations produced by global capitalism provide the structural cause for power asymmetries in the dependency approach. Impelled by the expansion of European capitalism from the 17th century, penetration by metropolitan capitals in the colonial period saw the economies of peripheral societies reoriented toward the needs of the metropole, through the production of primary commodities in exchange for Western manufactures. This is argued to lead to unequal exchange in trade between low-value resources and high-value manufactured exports, resulting in a cross-border appropriation of value by the metropole. “Dual economies” form in the periphery as a result, where expanding export sectors tied to the needs of the metropole exist alongside stagnant traditional industries serving local markets. Control of these industries by metropolitan capitals siphons off what economic surplus is produced in the foreign-dominated export sectors, which Andre Gunder Frank labels the development of underdevelopment by global capitalist relations of dependency. However, the specific forms of economic dependence are said to vary according to the period in which parts of the periphery were incorporated into the global capitalist system. Fernando Cardoso stresses the contrast between a colonial form of economic dependence based on the exchange of raw materials for manufactures under European imperialism that produces “underdevelopment,” and a neocolonial system based on the exchange of labor-intensive manufactures for technological and capital goods in the postcolonial period, characterized as “dependent development.”

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