Dependency School

ORIGINALLY DEVELOPED during the late 1960s to explore questions of development in Latin America and the Third World, the Dependency School came up with an influential theory of world capitalism and the global system. Inspired by the debates about imperialism, dependency theories focused on the processes of capital accumulation on a global scale. The critical analysis of global poverty attempted by dependency theory is based on a fundamental distinction between core and periphery, namely between economically developed countries (DCs) and least developed countries (LDCs).

The expansion of the capitalist mode of production to the LDCs causes, according to dependency theory, the exploitation of the work power in these countries, the unequal allocation of profit, the deprivation of work rights, and the general impoverishment of the local population in LDCs. Poverty in LDCs is not seen autonomously, but rather as a structural part of the globalization of economy and as the product of the economical intervention of the DCs.

One of the premises of the dependency theory is that the deregulation of the mode of production in LDCs (for instance in countries of Latin America) and the establishment of a peripheral capitalism in favor of multinational companies are not a factor of economical development of the underdeveloped or less developed countries, but rather a factor of their proletarianization.

This proletarianization caused by the expansion of world capitalism leads to the creation of a chain system of reliance between countries and economies, especially to an economic dependency of the LDCs on the DCs. As LDCs have neither the technological means nor the skill-management techniques of companies in DCs, nor the infrastructure for the development of a strong, competitive capitalism, they are forced to depend on the multinational companies of DCs.

As long as surpluses in LDCs are extracted in favor of the DCs, these surpluses cannot be used for further investment in LCDs. Because of these processes, LDCs are being economically excluded, while social and economic inequality is extended to new zones.

Despite the general agreement on the elements described above, namely that poverty in LDCs is a product of capitalist expansion regulated by DCs and that this expansion does not support the development of the LDCs, the dependency perspective is not a homogenous, concrete theory of underdevelopment and exploitation. Despite their Marxist orientations and their opposition to neoclassical economics, dependency theories differ in their interpretive approaches to (under) development and poverty.

For instance, André G. Frank attributes underdevelopment to processes of capital accumulation that colonizing metropoles imposed on their satellites/areas, while Ronald H. Chilcote focuses more on the class structure and the political processes of repression with the dependent countries. Immanuel Wallerstein introduced the macrosociological concept of the world system and adapted the view of dependency theory in order to provide an explanation of the world economy as a total system.

In his historical sociology of the world system, nation-states are variables of the broader world system, which is regulated by the capitalist market economy and by the hegemony of some core states imposed on weak peripheral regions. However, according to Wallerstein, this hegemony is not stable, for the global class struggle results in a continuous (or potential) change of interests and aims.

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