Question

6. Dependency Theory is one of two major explanations for the unequal distribution of the world’s wealth and power. Who was its leading proponent and what does it claim to be the role of High Income nations in global economic development

Answer 1

• Dependency Theory developed in the late 1950s under the guidance of the Director of the United Nations Economic Commission for Latin America, Raul Prebisch.
• Dependency theory differs from most Western approaches to studying political development. One difference is that this approach originated in the Third World (primarily Latin America), rather than among Western academics. Third World dependency thinkers were concerned with explaining the unequal and unjust situations in which they and their nations found themselves. Third World countries were poor while "developed" countries were rich.
  
• According to the theory dependent countries are not behind or catching up to the richer countries of the world. They are not poor because the lagged behind the scientific transformations or the enlightenment values of the European states. They are poor because they were coercively integrated into the European economic system only as producers of raw materials to serve as repositories of cheap labor and were denied the opportunity to market their resources in any way that compete with dominant states.
• They argue that Third World countries can take steps to improve their situation. One suggestion would be the formation of common markets, trading blocs, or cartels. The idea is that Third World countries share many common economic and trading problems in their relations with the industrialized core. By joining together and presenting a common front to the core they will gain leverage, and be able to secure greater advantages from their interactions with world core countries. By forming groups or cartels the periphery nations will have more power than any individual Third World country has in its relations with the core.
• A second suggestion for improving the situation is to force Third World country elites to confront their country's condition of dependency, and take voluntary steps to alter it. Thus elites in the capital might be convinced to use some of their wealth to invest in national construction projects or literacy programs, rather than importing luxury automobiles or taking expensive vacations abroad. The goal is for the elites to suspend their selfish habits of conspicuous consumption, and to use their wealth for national development. The elites would be encouraged to invest in their home countries, rather than abroad. Attempts to change elite behavior have generally not been very successful.
• Exportation of raw materials to dominant states that leads to foreign exchange and increase in productivity. Dependent states export raw materials though at a cheap price but later leads to foreign exchange, good international relations and economic corporation.