Crash Course on Debt crisis in the global south, and radical solutions:

#2 Dependency Theory and Uneven Development

In this episode of Crash Course we discuss Dependency theory. We try to understand what it is and why it has been lost in debates on the global south, after being dominant in the 70s and 80s.

Since the IMF and the world bank imposed their neo-liberal adjustment programs, development has become synonymous with attracting foreign direct investments (FDI) from multinational corporations. In this dominant worldview, developing countries need to focus on implementing policies (‘reforms’) that attract FDI at all cost. Success can be achieved by following the prescribed market-oriented changes that convert economic assets and activities in a potential tradable financial asset.

Dependency theory on the other hand departs from the opposite perspective. In this approach ‘underdevelopment’ is the result of a specific type of integration in a capitalist global economy that is uneven.

“Core countries benefit from the global system at the expense of periphery countries, which face structural barriers that make it difficult, if not impossible, for them to develop in the same way that the core countries did.”

We will discuss how dependency theory can help us to formulate different answers to the problems developing countries face today.

Speakers:
Ingrid Harvold Kvangraven
University of York

Ingrid Harvold Kvangraven is an Assistant Professor in International Development at the University of York’s Department of Politics. Her research is centered on the role of finance in development, structural features of underdevelopment, the political economy of development (including the role of international institutions), and critically assessing the economics field. She is a Founder and Editor of the blog Developing Economics, founder and steering group member of Diversifying and Decolonising Economics.

Podcast

Transcription

Note that this is not a verbatim transcription of the webinar, but a summarized version of it.

Rodrigo Fernandez on the previous series (Monetary Policy, Central Banks and Ideology) and this second series on the structural problems of the Global South, turning perhaps into a new debt crisis.

Rodrigo introducing Ingrid Kvangraven. She is an Assistant Professor in International Development at the University of York’s Department of Politics. Her research is centered on the role of finance in development, structural features of underdevelopment, the political economy of development (including the role of international institutions), and critically assessing the economics field. She is a Founder and Editor of the blog Developing Economics, founder and steering group member of Diversifying and Decolonising Economics.

Dependency Theory, outdated or out of fashion?

Ingrid Kvangraven: wanted to talk about what dependency theory (DT) is, and why it has gone out of fashion, or why everyone is saying that it is outdated. I want to present my own redefinition and discuss briefly how it could be applied today.

I was introduced to dependency theory as an undergraduate and a masters student, but it was always presented as a theory of the past, that wasn’t relevant anymore. That’s how you encounter it in textbooks and in articles and as a PhD-student that was also the impression that I had, but I was curious to read more. And that is kind of how this project started.

I wanted to find out why people are saying that it is outdated and what was exactly wrong with dependency theory. Is it all dependency theory that is considered outdated or only some of it? There seemed to be at the time a lot of very critical reactions towards dependency theory from all kinds of camps, really. Mainstream as well as critical

What is dependency theory?

What is dependency theory? I started to try to answer that question as a PhD-student. I realised that it was actually a very difficult question to answer. And depending on who you ask, you will get a different answer. That is because there isn’t ONE dependency theory. It is a body of scholarship that stretches decades. Depending on how you define it, you can say it stretches centuries. It is very often associated with Latin American scholarship, but it is not just that, you also have Samir Amin who is an important dependency theorist, who passed away a couple of years ago.

And you have a scholarships like the Colonial Drain theory which originated in India, which also has lots of elements of dependency theory, even though it was conceptualised long before dependency theory became a term. Andre Gunter Frank is perhaps the most famous dependency theorist, in the global north that is. In the global South you have different scholars that people will refer to: Celso Furtado, Tavares, Cardozo, Dos Santos, there is a wealth of different dependency theorists across Latin America and also in other parts of the world. Dos Santos sees dependency as “a situation in which the economy of certain countries is conditioned by the development and expansion of another”. That’s a very general definition. He doesn’t say here in the definition how it is conditioned, what that means, why it is conditioned. But there is this aspect of conditioning, that there is a link between a developing country and the global economy and that it affects the possibilities for development. It is a good starting point to understand what dependency theorists were interested in. There is disagreement among dependency theorists and lots of debates on what dependency theory is, how it was historically produced, what it means, what space there is for development, if it is even possible to develop. It is a really rich scholarship and I would encourage all of you to read because there is really interesting debates there, lots of special issues in the 1960s and 70s with marxists and structuralists and keynesianists and institutionalists all debating the different aspects of dependency and what that meant for the periphery.

There are different ways of defining the strands within dependency theory. Often they will be split into two or three camps like the Latin American structuralists, the neo-marxists, but there are also overlaps and it is difficult to categorise them very clearly and you will find similar ideas in other scholarships as well, like Colonial Drain theory or Staple (sp...) theory, that emerged in Canada in the 1930s where they look how Canada is dependent on the US and there is other strands of dependency like theories as well that I write about.

Why did it go out of fashion?

It has gone out of fashion. That is kind of clear. I just put up two screen shots from two articles that I came across when I was researching dependency theories. On is titled “In the Dustbin of History: Dependency Theory” by Foreign Policy. And “Dependency Theory - is it all over now?” is actually an article in The Guardian where they don’t dismiss dependency theory and is written by Jonathan Glennie who I saw join this webinar just now. But in the article they are saying oh it has been likened to conspiracy theory, that is how dependency theory is often seen by the public.

So why did it go out of fashion, is the big question and that is one of the things that I was very interested in. I found three main reasons. There are epistemological reasons: things that scholars find wrong with the theory and therefore see as a reason to discard it. There are empirical reasons, so things that have changed in the global economy, that some would say makes dependency theory irrelevant. Maybe it was relevant in the 50s and 60s but now things have changed so drastically that it has become outdated. And there are political reasons. And by political I mean the politics of academia, of knowledge production, what theories become dominant is not necessarily a question of which theories explain phenomena the best, it is also a political phenomena. That is something that I think is extremely important to understand why dependency theory became marginalised. I will quickly go through all three of them.

Epistemological

So epistemologically there is lots of critique of dependency theory in the 60s and 70s and the 80s and by the end of the 80s basically everybody agrees that dependency theory was something to be discarded to the dustbin of history. But the problem with this was that the theories that were criticized were very often kind of a straw man of dependency theory. So Cardozo called this that the way that dependency theory was consumed, especially in the US made it into this straw man easy to destroy, it was simplified, there was stereotypes, it was caricatured, and Andre Gunder Frank who was maybe a more simplified version of the theory was often taken as a spokesperson for a whole body of very rich and diverse scholarship. So you have lots of scholars criticising Gunder Frank and also Wallerstein in the 70s that became widely read and seen as the kind of end of dependency theory. Like Brenner had this important critique in 1977 where he critiqued Frank and Wallerstein. So there is misunderstandings about it being one theory. That led to one Frank becoming the spokesperson. But it also led to these misunderstandings related to people that didn’t read beyond Frank, they would see confusion rather than debate. They would say that in this article dependency theory is referred to as this thing, and in another article as something else. So they don’t even know what they are talking about and they can’t even define what dependency theory is. That is the impression you get when you read Lalowith, which is another important article in 1975 where he says that dependency theory is just a confused body of scholarship. There may be a few confused dependency theorists, but the confusion he was seeing was actually a disagreement among dependency theorists.

Tautological

There is also more serious critiques, like it being tautological. And this is something which I think some dependency theorists are sometimes guilty of. They say: oh you know, this country is dependent, therefore it is poor because it is dependent, without really explaining where the dependency comes from, how it was historically produced. I think most of the dependency scholarship does go back in history and explains how these dependent financial and productive structures were produced, but that is not always the case, so there is some tautological elements there. It has been critiqued for being reductionist, mechanic, denying Southern actors agency. And again I think often these critiques come from a misunderstanding, or from taking one theory and drawing conclusions based on that one theory about the whole scholarship. Which is not a strong epistemological critique, it is just a critique of one element. It is important to take some of them on board when we take the research program forward, and make sure that it is not tautological, it is not reductionist, but it is also important to keep in mind that these critiques are based on misinterpretations and misunderstanding of the scholarship.

Empirical

Now on to the empirical. That is something that you maybe are more familiar with. That you often hear that it is outdated, that it was possible to develop within global capitalism. That Asian countries were able to develop, capitalist development is possible, therefore dependency theory is wrong, as they say it is impossible. That is the logic I often heard when I asked about dependency theory. I think this is wrong, again, and I will bring up an example of how I think dependency theory actually can explain the development of South Korea. Most dependency theorists don’t say that development is impossible. Or that industrialisation is impossible. But they study how it is very difficult because of the constraints and the particularities of the countries that face these constraints. And Prebish has often been used to explain South Korea, Raul Prebish is one of the dependency theorists that is quite well known.

Another empirical reason that people use to justify why it should be seen as outdated, is the spread of global value chains, which means that peripheral countries can now enter global value chains and industrialise. They can move into manufacturing so therefor this is a whole different global economy that we see. Many would argue that dependency theory is mostly about looking at how developing countries export raw materials and then trade them for industrial goods and that that is what creates a dependent relationship. But Raul Prebish is especially well known for making this argument, but actually he didn’t make that argument. He made an argument about the type of exports that the peripheral countries export, which were often raw materials at the time. But he also made the point that low value added manufacturing goods could have the same types of (...?) that raw material exports could have. Just because a country moves into light manufacturing doesn’t mean that the conclusions that he drew aren’t still valid.

So in order to illustrate this point some more I am going to bring in an example of a country that has been highly integrated into the global value chain, to show how the dependency theory approach to the development in that country can still generate important insights. So I am going to look into Indonesia in a second.

Political reasons

As I alluded to earlier, research programs don’t necessarily move forward based on an objective measure of progress, It is not like science is cumulative, especially not the social sciences, where we just learn more and more and that lets us improve the understanding of the world. There is lots of political debates in the social sciences, and struggle for resources, for being able to determine the narrative, to set the terms of the debate, it is a very political process. And in the context of the cold war this was especially acute in economics, where neoclassical economics, the dominant theory in the economics department, especially in the US and in Europe, which presents capitalism as a more harmonious system than what dependency theory for example does. It was not just dependency theory that was dissolved (sp...?) since the 70s in economics departments, but also marxist economics, keynesian economics, institutional economics, so economics has been narrowed a lot. And economics is the most extreme, you see similar tendencies in a lot of the social sciences.

Redefining Dependency Theory

With that in Mind I would like to just present how I would like to define dependency theory. In order to demonstrate how it can still be relevant. And also because it hasn’t really been defined as a research program before. The definitions that exist tend to be either focused on Latin American theories or on specific elements within dependency theory, or specific theoretical traditions within dependency theory, but not looking at it as a research program. So I followed Lakatos here to develop this and to define this. He sees research programs as a collection of interrelated theories that have a common hypothesis that form the ‘hard core’.

This framework has been used to define lots of different research programs. A new research program doesn’t necessarily explain the same questions better, but rather different things from other research programs. You will see here that I have put a core hypothesis in dependency theory, is that global capitalism tends to be polarising. So it has inequality at its core, to what it is trying to explain this polarising tendencies in global capitalism. That is different from if you look at for example development economics today. The core things that that discipline tries to explain tend to have more to do with poverty reduction, more micro-oriented questions. So often these research programs are explaining different things, right? It is not necessarily that dependency theory was more mainstream in the 50s, 60s and 70s and was replaced by a research program that was looking at the same questions approaching it differently. Actually it was replaced by a body of theories that asked different kinds of questions.

Within the research program scholars will approach the hypothesis differently and there are different theories of why global capitalism tends to be polarising. So you have the monopoly capitalists, who look at monopoly capitalism leading to unequal exchange, you have the terms of trade debate within the dependency tradition, and you have those that look at the financial constraints as the main driver of global inequality... So there is differences there. But what I think is key and similar, or the same, across all those traditions, is in addition to this hypothesis, that they take a global historical approach, so the message is the same, and they focus on structures of production, and constraints faced by peripheral economies. And also I would say that they focus on both and that is important, but also the relationship between the two. And I believe that those are some of the strengths of the research program. So that if we want to push this research program forward and we think that it is relevant, these are the things that are important to retain. And then there are some weaknesses in some theories that we could discard.

How can it explain global inequality?

So that is how I worked to define it. Now I just want to apply it quickly, I just want to show how it is relevant. As I said I want to look at South Korea, because that is a case that is often used to discredit dependency theory. And I want to look at Indonesia, with the global value chain.

South Korea

With South Korea, actually Andrew Fischer talked about this at length in the previous episode of the Crash Course Economics, you can watch a more extensive explanation of the external constraints of South Korea on the website... But I think that when explaining South Korea's development, industrialisation, it is important to take an historical approach to see how capitalism developed in a particular way in South Korea. There was this development of industrial capitalism during colonialism in South Korea. Which is quite different from the way capitalism developed in other colonies. So Korean businessmen, as Eckert writes, were not so much subordinated by the political structure, but incorporated into it. So there was a class of Korean industrialists that emerged during colonialism. Very different form the very extractive colonialism that you see in other colonies. This development of the production structures and ownership during colonialism, laid the foundations for the industry that later emerged as what we now know as the developmental stage (or state? sp...). That has been written about at length; Emsden, Chibber, Ho, Margulis... But a lot of the developmental state literature is very focused on the policies that were implemented and that is important, but to fully understand why this was possible in South Korea and maybe not somewhere else, we need to also understand the historical development of capitalism in South Korea.

On the external constraints, as Andrew talked about at length, they could have been there. I mean they are usually there for peripheral economies, and in the case of South Korea, which was next to North Korea, so had massive geopolitical importance, they were relaxed, with lots of aid from the US in particular to South Korea, that made it possible for them to pursue an industrial strategy that most developing countries would not be able to pursue. And they had persistent deficits for decades, but they had external financing coming in and sustaining these deficits. And of course they were able to control trade and control capital in a way that many developing countries today aren’t able to do. So that was South Korea in one minute.

Indonesia: Global Value Chains

Now Indonesia, quickly. Again the historical approach is really important to understand how the limits to global value chains I would say in the case of Indonesia. So the formation of how capitalism and colonialism interacted with each other in Indonesia was very different from the case of South Korea. It was much more extractive, the economy was oriented towards extraction of raw materials. The five leading exports that accounted for 70% of the exports in 1900, still did 90 years later in 1990. The Five leading exports where still the same and they still accounted for 70 % of exports. So that says something about the durability of these economic structures. To understand how global value chains developed it is important to look at the developmental policies that were pursued by Suharto in the 50s and 60s and he also did receive quite a lot of support from Japan in particular, for geopolitical reasons. But there were limits to the developmental policies and in the end Indonesia also had to go through Structural adjustment programs. And in terms of production structures of course that is important to study in order to understand the economy and how global value chains are implemented. You saw some successful upgradings especially in the logging industry in Indonesia and that is impossible to understand through only firm level analysis, which is what a lot of the global value chain literature... how it approaches development. We need to also look at the resource ... (sp) of the country and the state support that Indonesia received, and in the 70s and 80s there was also historical ... (sp) because there was massive demand for these exports. But this relatively successful industry existed next to low productivity sectors, which also leads to limits to industrialisation, and this is what dependency theorists wrote about at length, this dual economy.

In terms of external constraints there were some that were relaxed, during that period when Indonesia was developing relatively rapidly, partly because of oil revenues, partly because of geopolitical support, but still the constraints were in the end hard and the had to go to the IMF.

Unfashionable but not outdated

Unfashionable but not outdated I would say. You can use it to understand South Korea better, to understand Indonesia better. That is important because constraint to structural transformation and finance tend to be poorly understood by economists. But we do see that there are these hierarchies in production and innovation and that there are massive inequalities in the world that need explaining. So than I argue that dependency theory, which takes these inequalities as a starting point, can be fruitful to understand those issues

Recent works

I just wanted to put some more recent work on the slide here, that you can look at. So I pulled out some of the key insights from the dependency theorists, for example falling terms of trade for export, which I mentioned earlier briefly what Prebish and Singer talked about: there has been work that documents this existing for peripheral countries today. Halmstadt (...sp) for example and also Ocampo. Inability of peripheral countries to borrow their own currency in international markets, that is something that is talked about a lot. That is like a symptom of dependence that you can see in the global system today. There has been a fall in the share of domestic value added, associated with many developing economies’ integration into global value chains. Caraballo and Jiang have written about this recently. And there is lots of scholars that have gone about documenting unequal exchanges in different ways, which is one of the auxiliary hypothesis of dependency theory.

Conclusions

If we want to understand global inequality and constraints to production and finance in the periphery, a dependency research program can help. Particularly urgent to understand polarizing tendencies and constraints to development in the wake of the economic crisis following covid-19.

Dependency theory has largely been excluded through a political process. So it is not legitimate to call it outdated or irrelevant or epistemologically weak, because these critiques are based on a misunderstanding of what dependency theory is, though worth to be taken into account in certain regards. Also if we wish to get the research program further we should include insights that are relevant like gender, race. Dependency theory was criticised for not including these, but some did, and Christopher ... (sp) writes about this in his book form 1989.

Q & A

The politics of knowledge production and role of ideology

Sara Murawski: When I read your work on dependency theory I don’t understand why it is outdated because it all seems quite to the point and obvious to me. You write in one of your articles that it is time to leave the ideological battles over knowledge production aside so that we can acknowledge the hierarchies and dependencies in our global economy. The politics of knowledge production that you mentioned earlier was also a theme that Andrew Fischer spoke of two weeks ago. At the same time part of your presentation regarding the marginalisation of dependency theory relates to the fact that it is ideologically and politically driven, right? Because of the neoclassical dominance for example. When you write that we should leave aside the ideological battle what do you exactly mean? Does it also imply that dependency theory is free of ideology?

Ingrid: That is a good question. I am glad I can clarify. I don’t think that dependency theory is free of ideology at all. I think ideology is key in the production of knowledge and in all social sciences. And we should forefront that, bring it out and have more discussion about the ideological underpinnings of social science theories. A lot of dependency theory focuses on class rather than on individuals, on inequality, on the polarising tendencies of capitalism which there are ideologies associated with the way dependency theorists approach economic questions, or socio-economic questions, and in the same way that there are ideological underpinnings of the way that neoclassical economics approaches economic questions (... sp) individuals, and see individuals as separate and rational optimising and mark this as perfect. And imperfections as deviations from that perfect ideal.

So when I say that we should leave the ideological battles behind, I think what I really mean is that dependency theory shouldn’t be excluded based on ideology , that is something that happened. It shouldn’t be dismissed based on ideology, but I would like to bring the ideological battle back in and have us talk more about the ideology of social sciences. And allow the debates to happen within economic departments, within other social science departments and in policy as well. So more pluralism.

On the role of monopoly capitalism

Rodrigo Fernandez: (...) You separate the core business that they all have in common, and some auxiliary hypotheses that are questioned by several theorists. One of these auxiliary hypotheses is the role of monopoly capitalism and dependency. In the 1970s there was a lot of debate on monopoly capitalism, it was the time of late capitalism, of Ernest Mandel and Paul Sweezy. Since then we have of course had this period of globalisation, a lot of global foreign direct investments, a large part of those were mergers and acquisitions, leading to an ever larger concentration of corporate power. In my understanding there is quite a difference between the type of transnational corporation that existed in the 1970s, and the ones we have now. With the much larger power to have these global value chains. So this is more a question on the empirical level. Do you think first that we do have a different type of transnational corporation? And secondly what would this imply for the dependency approach or the research program of dependency theories?

Ingrid: Dependency theory is often associated with monopoly capitalism, which in a way is not really helpful. Because that excludes a lot of scholarships that I would include in the dependency theory tradition that doesn’t think that monopoly capitalism is the driving force. I don’t personally think that monopoly capitalism is the most helpful way to think about the polarising tendencies of capitalism. But to your more specific question on transnational corporations: They definitely have changed, for sure, they are different than the way that they were. They are structured differently, they operate in developing countries in a different way, and what I tried to demonstrate with the example of Indonesia: even tough countries are able to integrate and be a part of ‘development’and manufacturing in a more active way then at least some countries were in the past, it doesn’t mean that aspects of dependency and the constraints that they face are any less acute or any less relevant. Actually they appear to be more relevant and the polarising tendencies are still there. Although transnational corporations played a large role when Furtado was writing they were mostly in the ISI-sector or the domestic economy, now they tend to be more in the export sector. But ok, production is structured differently but it still has that same drive. And what I think is important is that the Global Value people, the GVC-crowd tend to look more at the firm level, at industry at the firm level and look at the policies that affect the firms in the very kind of atomistic way. That literature ought take in account how the historical production emerged, that that effects how a country integrates into global value chains. Will Milburg (sp?) has done quite good work on this. He published recently on it. he does use the term monopoly capitalism, to look at some intellectual property rights as well. What it means for the research program is that it provides lots of fertile ground for more research to understand these issues better.

Steffen Haag: How to defend dependency theory against the argument that it neglects agency from actors in the Global South?

Ingrid: I would say that most of dependency theorists take the external constraints as a given almost. And then they are studying what is going on in the particular country that they are interested in and how that relates to the global economy. In that sense when the critique, that often went against Frank, of DT focusing too much on external constraints, that is missing what dependency theorists were actually doing. They were very much concerned with what was going on in Brazil, in Chili, in Argentina, and the different actors that were involved in trying to create dependence. A lot of it was about the limits of import substitution industrialisation and looking at agents within the country as well as outside. And they were not saying that agents within the global south couldn’t do anything. They were looking at the constraints and what the possibilities were. So that is kind of how I see it as a misreading. And there are different aspects. You could go to the conservative side of dependency theory where you have Cardoso, who was all about agency. He goes maybe to far in looking at how in looking at the possible agency that actors in the global south have, and downplays the external constraints... That is how I would defend it.

Desiree Poets: I wanted to ask for Sources that discuss the role of indigenous people and race and gender in historical development of dependent economies and the ongoing reproduction of dependency. I know Clovis Maura in Brazil did some work on race...

Ingrid: My mind is banking on names, and I can’t find the Christopher Kay book, although I have it somewhere, but his book from 1989, chapter 3 in that book, is all about race and dependency. You will find lots of scholars mentioned there. And I also have some sources in my paper Beyond the Stereotypes ... Dependency Theory.

Ghassen Ben Khelifa: One of the main recommendations of the dependency theory especially from Samir Amin is the delinking from the global capitalist system. To what extent is this still possible today for the countries in the Global South and especially of the Arab Region?

Ingrid: So delinking, what Samir Amin wrote about it I think is often the misunderstanding, it does not mean autarky, shutting yourself off from the global economy. The way Samir Amin saw it was reorienting your national priorities towards the needs of the people, rather than the needs of global capital. And he saw this as something that was almost impossible to do completely. In some of his work he talks about China doing it for 70% and Senegal was able to do it 10%, which is a kind of weird way of categorising delinking. With that definition of delinking in mind, you could argue that South Korea in a way ‘delinked’because it managed its production and its economy and it oriented that towards the need of at least the domestic capitalists, rather than the global capitalists.

Using policies that aren’t that acceptable today. There is that element today that to delink it is more difficult to use trade policies and to intervene in trade the way that South Korea did. The same for finance, it is more difficult to use that pro-actively in the way that South Korea did. In that sense, yes it is more difficult to delink. It is still possible, there is policy space there, more than developing countries are using. This is something both Dani Rodrick on the mainstream and (... name sp?...) on the heterodox side have written about quite a bit. A lot of the time it is not impossible for developing countries to implement pro-active developmental policies, it is actually quite neoliberal politicians in the global south and also of course more political influenced from the IMF and the World Bank, that isn’t necessarily disallowing it, but strongly discouraging tariffs etcetera. That said, even if the country were to implement these policies and go against the WTO and whatever, and be more pro-active, it is still going to meet limits, within the global economy there are these contradictions and external constraints. So it is still a limited policy but I think there is definitely space to push for it more than has been done.

Rodrigo: Wouldn’t you say that instead of focusing on possibilities for delinking it is much more important to change the structural conditions? And the institutions that push for them, or uphold them, like the IMF, WTO, etcetera?

Ingrid: That is a great way of putting it, yes. Because it is so difficult for a country that you actually need to change the whole global system to actually make it possible for countries to do what they want to do.

Nelson N’goma: On the relevance of following progress as modernisation, and a statist development program. How would the dependency theory research program address critiques from post-developmental or alternative development schools that question the relevance of centering progress on modernisation? Such as industrialisation. And the top down statist developmental program that follows dependency theory respectively?

Ingrid: That is a really important question and again I think that it is true that some kinds of dependency theory fall into the same trap as modernisation theory, trying to just promote industrialisation and saying that we need to do different things to achieve that than to just open up and liberalise. Celso Furtado was writing about the limits of industrialisation in Brazil and not really promoting industrialisation in a way that modernisation theorists do. The dependency theory program is much richer than just promoting industrialisation. But I think there is important debates to be had within post colonial scholarship and dependency theory, like what is development, do we need to problematize and get rid of the term development altogether? There is some great literature on this debate: Kapoor wrote one not too long ago, that basically compares and contrasts and figures out what are the strength of dependency theory versus post colonial theory, and post-development.

And from a more materialist perspective I would say that the dependency program is about production and about material benefits to production and how those benefits don’t actually accrue to people in the global south. So there are material things that we want to improve in the periphery: health and education, quality of life. So there are some things that con not be dismissed for being western and associated with development and western notion of progress, because they are actually about human beings being able to survive.

That is an important aspect of dependency theory that post colonial theory in a way, or some aspects of post colonial theory, neglect.

Rodrigo: Do you think that the ecological question or climate change changed also the nature of the need to develop?

Ingrid: I don’t think it changed the need to develop if you mean development being people being able to live happy. or the need to redistribute and re balance the global economy. Of course it changed the way we think about what kind of industries are possible to use as a way to develop. But there are some fruitful avenues of research that actually I am not that familiar with, but there are some climate economists and environmental economists who are using the concept of unequal exchange to also talk about the unequal impact of climate change and pollution. That is something that needs to be incorporated and included urgently in all our thinking about progress.

Bikrum Gill: On the role of the relative success of decolonization, and different terms for African states. What role does the relative success and consolidation of decolonisation play in explaining how a state is able to integrate into global networks on less dependent terms? And at the end there is an important punch line that says: perhaps African states could not access such favourable terms, due to the absence of a consolidated decolonial state s regional counter power.

Ingrid: Of course decolonialisation was incredibly important to allow countries to have more space to develop. During colonial times the exploitation was extremely coercive. With decolonisation there was more policy space. So you could say that it gave more space for independent policies and you saw that also with African countries that there were lots of pretty radical progressive governments that tried to counteract the dependent relations that had been established during colonialism. They did implement ISI in many cases (ISI: Import substitution industrialisation). Some of these radical politicians were assassinated, so it was a real life and death issue after decolonisation. So it wasn’t that they were getting the support to do this from the US and the former colonisers. So they had some space but it was a very hostile global environment. Of course then the limits were reached when most of the countries were using external financing to support ISI, ran into debt difficulties and then eventually had to go to the IMF and the World Bank and entered into the ‘Lost Decade’ where all of these attempts to re balance and reorient the economy were undone. So I would say that decolonisation did lead to a different scenario where there was more space, but that that space was then closed again. And of course now there is more space than there was during colonialism, of course there is a very different global economy. But I still wouldn’t day that these countries are autonomous to do whatever they want, because there are these hard constraints on foreign currency, on access to technology, access to finance...

Ximena Zapata: Do you find dependency theory useful to read contemporary patterns of Chinese, Latin American an African relations?

Ingrid: I think so. And there is quite some literature about it. Right now it maybe simplifies too much, saying like China is playing the same role as France or England, while I don’t think it is the same, but in terms of looking at how China is able to relax some of the constraints that some Latin American or African countries are facing by offering certain kinds of finance, certain kinds of aid, of support, is key to understand what is going on. And they are a very important layer in Africa and Latin America. It is important to look at that from a dependency lens as well and how they interact with the production there.

Rodrigo: When you say relaxing, creating demand perhaps for their raw commodities, do you mean that thereby they created better conditions for development? Or they just recreated new forms of dependency relations?

Ingrid: I think that in one sense they create space for autonomous policies, for example with the commodity boom that was space for African and Latin American countries to pursue quite a few more active policies, which most of them didn’t do, but could have done. So raw materials is one, but also they provide aid and hard currency in some instances. I think the dependency theory program is important in order to understand how does that actually change: ownership, relations of production, within the country how does it help those countries to actually develop technology and their own innovation, industry. I think there dependency theory can help to direct our attention to these questions, which ten leads us to see that there is dependence still in that relationship.

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About this series:
Crash Course on Debt crisis in the global south, and radical solutions

In this series, we discuss the field of debt crises in the ‘developing world’, and the different aspects that determine the subordinate economic and financial position of the Global South and why this matters. Has anything changed since the 1980s debt crises when a global movement called for a debt jubilee? What are the prospects for change? And how can these kinds of debt crises be prevented in future?