Dependency theory
Much theorizing about development, and indeed the very expressions ‘devel-
oped country’ and ‘less developed country’ suggest that economic develop-
ment occurs in a succession of stages and today’s developing countries are at
some earlier stage. The implicit argument is that development is something
diffused from developed to developing countries so openness is crucial and
beneficial even if it has to be managed. Recent critiques of current interna-
tional economic relations have focused on arguing for more donor aid or
greater access to developed-country agricultural markets. Free-market econo-
mists have instead emphasized the need to push developing countries to adopt
good (i.e., free-market) policies. Both perspectives accept that openness is
inherently a good thing even if they disagree on how to manage the engage-
ment between developed and developing countries. The dependency school of
economics and social science takes a very different view. Dependency schol-
ars argue that openness and integration, whether considered in terms of
economics,social or political criteria, is a ‘bad thing’and has an adverse
impact on growth and development (Lall, 1975:800).
The dependency school agrees that openness is the crucial deep determinant
of long-run economic growth and development. Dependency writers begin
with a global-historical perspective. Andre Gunner Frank argues ‘We cannot
hope to formulate adequate development theory and policy for the majority of
the world’s population who suffer from underdevelopment without first learn-
ing how their past economic and social history gave rise to their present under-
development’ (1966:4), and a focus on single country case studies ‘fails to
explain the structure and development of the capitalist system as a whole and
to account for its simultaneous generation of underdevelopment in some of its
parts and of economic development in others’ (1966:5). Dependency theorists
argue that underdevelopment is not an original starting point and that the pres-
ent of developing countries does not resemble the past of the now-developed
countries. Contemporary underdevelopment, they argue, is in large part ‘the
historical product of past and continuing economic and other relations between
the satellite and the now-developed metropolitan countries’ (1966:5).
Contemporary underdevelopment, according to this argument, is the result of
past exploitation. The corollary of these viewpoints is that the underdeveloped
parts of the world will do better when isolated from contact with developed
countries. This has happened, argues Frank, during the Napoleonic wars,
World War I, the Great Depression in the 1930s and World War II, when Latin
America (especially Argentina, Brazil and Mexico) lost contact with devel-
oped countries and experienced promising spells of industrialization. Frank
advocates a deliberate severing of ties with the developed world (called
‘delinking’) to promote independent growth and industrialization.
While dependency scholars may agree on some fundamental issues there is
much less agreement on how exactly this exploitation and underdevelopment
actually occurs. The nature of dependency has certainly changed over time.
284 Patterns and Determinants of Economic Growth