Did you know that there is a branch of sociological theory dedicated to studying the effects of colonialism?
We will explore dependency theory and what it has to say.
- We will go over how colonialism caused ex-colonies to get into dependent relationships and look at the definition of dependency theory.
- Further, we will touch on the principles of dependency theory and neo-colonialism, as well as the importance of dependency theory as a whole.
- We will examine some examples of strategies for development as outlined by dependency theory.
- Finally, we will outline some criticisms of the dependency theory.
Definition of dependency theory
First, let's clarify what we mean by this concept.
Dependency theory refers to the idea that ex-colonial powers retain wealth at the expense of the impoverished former colonies due to the wide-ranging effects of colonialism in Africa, Asia, and Latin America. Resources are extracted from the 'peripheral' underdeveloped ex-colonies to the 'core' wealthy, advanced states.
Fig. 1 - Developed nations have left the developing countries poverty-stricken by exploiting and extracting resources from them.
Dependency theory is broadly based on a Marxist theory of development. According to the theory, the ex-colonies are being economically exploited by former colonial powers and need to isolate themselves from capitalism and the ‘free market’ in order to develop.
Andre Gunder Frank (1971) argues that the developed West has 'underdeveloped' developing nations effectively by relegating them to a state of dependency. It is important to study dependency theory to understand how this has come about.
The origins and importance of dependency theory
According to Frank, the global capitalist system we know today developed in the sixteenth century. Through its processes, nations in Latin America, Asia, and Africa became involved in a relationship of exploitation and dependency with the more powerful European nations.
Dependency theory: global capitalism
This global capitalist structure is organised so that the rich ‘core nations’ like the USA and the UK are at one end, and the undeveloped or ‘peripheral nations’ are at the other end. The core exploits the periphery through its economic and military dominance.
Based on Frank’s theory of dependency, world history from the 1500s to the 1960s can be understood as a systematic process. The core developed nations accumulated wealth by extracting resources from the peripheral developing countries for their own economic and social development. This then left the peripheral countries poverty-stricken in the process.
Frank further argued that the developed nations kept the developing countries in a state of underdevelopment to profit off their economic weakness.
In poorer countries, raw materials are sold at lower prices, and workers are forced to work for lower wages than in developed countries with higher living standards.
According to Frank, developed nations actively fear losing their dominance and prosperity to the development of poorer countries.
Dependency theory: historical exploitation
Under colonialism, powerful nations took control of other territories for their own benefit. The countries under colonial rule essentially became part of the 'mother country' and were not seen as independent entities. Colonialism is fundamentally linked to the idea of 'empire building’ or imperialism.
'Mother country' refers to the country of the colonisers.
Frank argued that the prime period of colonial expansion took place between 1650 and 1900, when Britain and other European nations used their naval and military powers to colonise the rest of the world.
During this time, the powerful nations saw the rest of the world as sources to extract from and exploit.
The Spanish and Portuguese extracted metals like silver and gold from the colonies in South America. With the industrial revolution in Europe, Belgium benefitted by extracting rubber from its colonies and the UK from oil reserves.
European colonies in the other parts of the world established plantations for agricultural production in their colonies. The products were to be exported back to the mother country. As the process evolved, colonies started engaging in specialised production - the production became climate dependent.
Sugarcane was exported from the Caribbean, coffee from Africa, spices from Indonesia, and tea from India.
Consequently, many changes occurred in the colonial regions as colonial powers established local systems of government to continue plantation and extract resources.
For instance, the use of brute force to keep social order became common, as well as the tactful employment of natives to run local governments on behalf of the colonising power to maintain the flow of resources to the mother country.
According to dependency theorists, these measures created a rift between ethnic groups and sowed the seeds of conflict for future years of independence from colonial rule.
Dependency theory: unequal and dependent relationship
There were several effective political and economic systems across borders in the pre-colonial period, and economies were mostly based on subsistence farming. This was all jeopardised through the unequal and dependent relationships formed with colonising nations.
Dependency theory, colonialism and local economies
Colonialism knocked down independent local economies and replaced them with mono-culture economies which geared themselves to export specific products to the mother country.
Due to this process, colonies got involved in producing goods like tea, sugar, coffee, etc., to earn wages from Europe instead of growing their own food or products.
As a result, colonies became dependent on their colonising powers for food imports. The colonies had to purchase food and necessities with their inadequate earnings, which invariably disadvantaged them.
Fig. 2 - Due to unequal distribution of wealth, the poor are forced to seek help from the rich and powerful.
European countries further used this wealth to drive the industrial revolution by increasing the value of production and manufacturing goods for export. This accelerated their capacity to generate wealth but increased economic inequality between Europe and the rest of the world.
The goods manufactured and produced through industrialisation entered the markets of developing countries, weakening local economies and their ability to develop internally on their own terms.
A suitable example would be India during the 1930s—40s, when cheap imported goods from Britain, such as textiles, sabotaged local industries like hand-weaving.
Dependency theory and Neo-colonialism
The majority of the colonies achieved independence from colonising powers by the 1960s. However, European countries continued to view developing countries as sources of cheap labour and resources.
Dependency theorists believe that the colonising nations had no intention of helping the colonies to develop, as they wanted to continue reaping benefits from their poverty.
Thus, exploitation persisted through neo-colonialism. Although European powers no longer exercise political control over developing countries in Latin America, Asia, and Africa, they still exploit them through subtle economic ways.
Principles of dependency theory and neo-colonialism
Andre Gunder Frank points out three main principles of dependency theory that underpin the dependent relationship in neo-colonialism.
Terms of trade benefit Western interests
The terms of the trade keep benefiting Western interests and development. After colonialism, many ex-colonies remained dependent on their export revenue for basic products, e.g., tea and coffee crops. These products have low value in raw material form, so they are bought cheaply but are then processed profitably in the West.
The increasing dominance of transnational corporations
Frank brings attention to the increased dominance of Transnational Corporations in exploiting labour and resources in developing countries. As they are globally mobile, these corporations offer lower wages to take advantage of poor countries and their workforces. Developing countries often have no choice but to compete in a ‘race to the bottom’, which harms their development.
Rich countries exploit developing countries
Frank further argues that wealthy countries send financial support to developing nations in terms of loans with conditions attached, e.g. opening up their markets to Western companies to continue exploiting them and making them dependent.
Dependency theory: examples of strategies for development
Sociologists argue that dependency is not a process but a permanent situation from which developing countries can only escape by breaking free from the capitalist structure.
There are different ways to develop:
Isolation of economy for development
One method of breaking the cycle of dependency is for the developing country to isolate its economy and affairs from more powerful, developed economies, essentially becoming self-sufficient.
China is now emerging as a successful international superpower through isolating itself from the West for decades.
Another way would be to escape when the superior country is vulnerable - like India did during the 1950s in Britain. Today, India is a rising economic power.
Socialist revolution for development
Frank suggests a socialist revolution may help overcome elite Western rule, as in the instance of Cuba. Although in Frank’s view, the West would reassert its dominance sooner or later.
Many African countries adopted the doctrines of dependency theory and started political movements aimed at liberation from the West and its exploitation. They embraced nationalism rather than neo-colonialism.
Associate or dependent development
In these circumstances, a country remains part of the system of dependency and takes up national policies for economic growth, such as import substitution industrialisation. This refers to the production of consumer goods that would otherwise be imported from overseas. Quite a few South American countries have successfully adopted this.
The biggest flaw here is that the process leads to economic growth while fostering inequalities.
Criticisms of dependency theory
Goldethorpe (1975) suggests that some nations have benefitted from colonialism. Countries that were colonised, such as India, have developed in terms of transportation systems and communication networks, compared to a country like Ethiopia, which was never colonised and is much less developed.
Neoliberals would mainly consider the internal factors responsible for underdevelopment and not exploitation. In their opinion, poor governance and corruption are to blame for the shortfalls in development. For example, neoliberals argue that Africa needs to adapt to more of a capitalist structure and pursue less isolationist policies.
Dependency Theory - Key takeaways
Dependency theory refers to the idea that ex-colonial powers retain wealth at the expense of the impoverished former colonies due to the wide-ranging effects of colonialism in Africa, Asia, and Latin America.
The developed West has 'underdeveloped' poor nations effectively by relegating them to a state of dependency. This global capitalist structure is organised so that the rich ‘core nations’ like the USA and the UK are at one end, and the undeveloped or ‘peripheral nations’ are at the other end.
Under colonialism, powerful nations took control of other territories for their own benefit. Colonial powers established local government systems to continue plantation and extract resources.
- Three main principles of dependency theory that underpin the dependent relationship in neo-colonialism are: terms of trade benefit Western interests, the increasing dominance of transnational corporations, and that rich exploit developing countries.
- Strategies to break out of the cycle of dependency are isolation, socialist revolution, and associate or dependent development.
- Criticisms of dependency theory are that ex-colonies have actually benefitted from colonialism and that there are internal reasons for their underdevelopment.
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