Part 2

Evaluating Dependency Theory

There are a number of key criticisms of Dependency Theory:-

• The concept of ‘dependency’ is imprecise and, therefore,  difficult to operationalise and measure. Gunnar Myrdal (1968) did attempt to balance the amount of investment put into the developing world and the amount of profit taken out. However, most sociologists accept that this too crude a method to accurately measure dependency, exploitation and subordination.
  Similarly Frank’s criteria for categorising particular societies as ‘core’ or ‘periphery’ is not always clear. Plus, it has been suggested he was being oversimplistic. Eg: Canada and Taiwan are satellites of the USA because they are heavily dependent on American trade. However, the relationships are not usually considered exploitative. The American economy needs positive trading relationships with both Canada and Taiwan.

• The success of the so-called ‘Asian Tigers’ (Thailand, Indonesia and, in particular, South Korea) in the late 1980s and the 1990s was hailed in some quarters as showing that Frank was wrong and Modernisation Theory did not always result in dependency. In these cases, the investment came from Japanese aid and transnational investment. However, the neo-Marxists pointed out that the Asian Tigers were heavily in debt and much of their industrial base was controlled by Japanese TNCs. They were also keen to point out the economic success of the Asian Tigers depended on people working very long hours for very low wages, with only the top 10% of the population really benefiting. When the Japanese economy ran into serious problems in the 1990s and much of its investment was pulled out, the economies of the Asian Tigers became seriously unstable. In 1997 Thailand, Indonesia and South Korea were all obliged to accept Western rescue packages.
  It remains to be seen if the new investment-dependent ‘tigers’ of India and Brazil will prove as vulnerable.

• Dependency Theory does not adequately address the issue of homegrown elites. Frank glosses over the fact that Western exploitation of developing nations usually has been - and still is - facilitated by the local elites. Such elites played a critical role in the slave trade and colonialism Today many of them sit on the boards of TNCs and take financial advantage of the huge sums of money being injected into their countries via aid.
  The Commission for Africa (2005) reported that poor governance and corruption elite kleptocracies were partly responsible for the poor condition of many African countries at the start of the 21st Century.

• Liberals like John Goldthorpe (1975) have been keen to point out that colonialism has had positive benefits such as providing developing countries with a basic infrastructure. Colonialism provided people with wage-labour and made more efficient use of land. Goldthorpe also points out that, following World War II, countries without colonies - eg: Germany and Japan - have prospered more than those with empires. Moreover, he points out countries which were never colonised fully, such as Ethiopia and Afghanistan, face severe problems in development because they lack the infrastructure provided through colonialism.

• Timmons Roberts & Hite criticise Dependency Theory for failing to explain why there appear to be greater levels of exploitation over time and why there appear to be significant differences among poorer countries. However, commentators such as Peter Evans (1979) and Gary Gereffi (1994) argue that the core is not always homogenous and that differences in the periphery elites can explain different political regimes, economies and class relationships in the peripheral countries.

Arguably the key contribution Dependency Theory has made is to move debate beyond the Modernisation Theory approach that lack of development was due solely to the internal culture of developing nations. Instead Frank focused on the role Western nations played in creating the conditions in which ex-colonies often found themselves after independence.

However, the fundamental weakness of Dependency Theory is that if offers no realistic solutions to global poverty while Capitalism has brought tangible benefits to the world - even if very unequally. The collapse of Communism in Europe in the early 1990s and the apparent conversion of China to a form of entrepreneurial Capitalism in the late 1990s further undermined the credibility of Dependency Theory.

World Systems Theory

World Systems Theory was developed by Immanuel Wallerstein (1979) as a response to criticisms of Dependency Theory. It s based on 4 underlying principles :-

1. Individual countries or nation-states are not an adequate unit of sociological analysis. Wallerstein held that the focus must be on the overall social system that transcends national boundaries - as it has done for centuries - and not on the concept of nation-state exploiting nation-state, as per Frank, Capitalism has created the world order or Modern World System (MWS) because capital has always ignored national borders in its search for profit. Dominated by the logic of profit and the market, the MWS forms one unified system.

2. Wallerstein builds upon Dependency Theory by proposing that the MWS is characterised by an economic division of labour made up of a structured set of relations between 3 types of capitalist zone.-
   # the core - the developed countries which control world trade and monopolise the production of manufactured goods
   # the semi-periphery - countries like Brazil and South Africa which have urban centres like those of the core countries but also extremes of rural poverty - they are often connected to the core because the core contract work out to them
   # the periphery - the countries whch provide the raw materials (eg: cash crops) to the core and semi-periphery and which are the emerging markets into which the core countries market their manufactured goods

3. Wallerstein argues that countries can be upwardly or downwardly mobile - although relatively few countries have moved up. This theoretical mobility resolves a key weakness in Dependency Theory - ie: the sheer variation in the developing world. The Asian tigers could be seen as moving up into the semi-periphery while some have even argued that the UK may

now be a semi-peripheral, rather than core, country. An example of Britain being manipulated by the MWS, it could be argued, was being forced out of the European Monetary System in 1992 by currency speculators like George Soros - with the result that the Conservative government was obliged to adopt economic and politica policies it had previously rejected.

4.   The processes by which surplus wealth is extracted from the periphery are those described in Dependency Theory

The MWS is constantly evolving in its search for profit, as indicated by ongoing commodification, de-skilling, proletarianisation and mechanisation.

Evaluating World Systems Theory

Like Frank, Wallerstein is an unashamed Marxist. However, unlike Frank and, for all that World Systems Theory paints a decidedly grim picture of the world, there is a strong element of optimism in his grim analysis. Like Karl Marx himself (1867), Wallerstein believed that the MWS will lead to so many people being dispossessed, excluded, marginalised and poor that they will eventually rise up in revolution, leading eventually to a socialist world economy. However, again like Marx, Wallerstein is vague about how such a socialist world economy would come about and what it would be like.

Also like Marx, Wallerstein focuses heavily on the economic aspects of the system, largely ignoring politics, culture, etc - effectively economic determinism. The capitalist core will allow political and social diversity in the semi-periphery and the periphery only while it does not in any impede control by the MWS. On this basis, of course, Wallerstein is heavily criticised by Modernisation theorists for ignoring what they see as the cultural failings of less developed countries - eg: he does not comment on corrupt elites or wasteful spending.

Also like Frank, there are problems with Wallerstein’s methodology. The theory is abstract, vague in its definitions of ‘core’, ‘peripheral’, etc, and many of its propositions are difficult to measure and test.

Nonetheles, the likes of Gereffi see World Systems Theory as being more explanatory than Dependency Theory which Chrisopher Chase-Dunn (1975) criticised as being overly descriptive.

In broad terms Wallerstein was the first sociologist to use the concept of ‘globalisation’ - though he himself did not use that term - and he drew attention to the international division of labour, stretching across various ethnic and cultural groups, as the basis of global inequality.

More recently a number of sociologists have focused on the economic interdependence of so-called core, semi-periphery and periphery countries, pointing out that problems in the developing world  (eg: financial crises due to debt) can have ripple effects on the economies of core countries, leading to unemployment and destabilisation of Western currencies.

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