What are the major concepts in dependency theory?

Major concepts in dependency theory:

Following are the major concepts in dependency theory:

Dependency as the result of a Historical Process:-Dependency is the result of a specific historical process.

Through centuries of colonialism and domination, the colonial and dominant capitalist powers restructured the socio-economic institutions of the colonies and underdeveloped regions; and integrated the economies of these countries and regions as resource suppliers into the world economy in accordance with the requirement of capitalism.

As a result, the colonies and other underdeveloped regions became the suppliers of primary commodities and the markets for the finished goods manufactured by the colonial and dominant capitalist economies. Dependency theorists argue that even after the end of formal colonialism, the structure of the world economy remains without any change. 

Core, Periphery, Semi-Periphery, and Enclave Economy:- Dependency theorists categorize the economies into the two broad categories, i.e., the core and the periphery.

The core economies are the developed countries in the global north (e.g. in Europe, the USA, and Japan) characterized by advanced technology and industries, supported by powerful state governments, a strong middle class (bourgeoisie) and a large working class (proletariat). In addition to the core, terms such as the ‘centre’ and ‘metropolitan’ are also used to denote the industrially developed countries in the global north.

Dependency Theory as a Critic of Liberal Theories:-Liberal thinkers of economic development such as Adam Smith (1723-1790), believed that economic activity should be spontaneous and freed from all forms of regulations. Smith argued that if economic activities were allowed to operate without regulations, then it would operate in accordance with its own rules and bring immense progress in society.

In tune with Smith, Jean-Baptiste Say (1767- 1830) supported laissez-faire (this French term refers to the policy, which allows free functioning of the economy) and held that free functioning of the capitalist economy without government intervention would naturally bring immense prosperity and full employment in society.

Critique of Modernization Theory:-Modernization theory is a perspective that the less developed countries can achieve development through accelerating economic growth and replacing the traditional values and socio-political and economic systems with that of the developed countries. 

Modernization theory equates development with mass industrialization, a higher level of economic growth, and the liberal democratic values.

Development of Underdevelopment:- ‘Development of underdevelopment’ is a concept proposed by Andre Gunder Frank to denote the deteriorating economic condition of the peripheral states as the result of their dependency on the core.

According to Frank, underdevelopment is a condition fundamentally different from undeveloped. Undeveloped is a condition of a region, in which its resources are not being utilized. For instance, Asia, Americas, and Africa during the pre-colonial period were undeveloped. Their land and natural resources were not utilized on a scale consistent with their potential.

Neoliberal Globalization Entrenching the Dependency:- Most of the dependency theorists hold that the current phase of globalization is ‘neoliberal globalization dominated by transnational corporations (TNCs)’. As a result, the production of manufacturing goods concentrates in the hands of a few TNCs, which makes an oligopoly market at the global level.

According to the dependency theorists, this will slow down production and speed up income polarization. Neoliberal globalization also witnesses increasing dependency of the peripheral states on the core and international financial institutions for capital.

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