Developing the Periphery & Theorising the Specificity of Peripheral Development From modernisation theory to the different theories of the dependency school ADRIANA CERDENA CALDERON LAURA MALAJOVICH SHAHANA DASTIDAR 2 November 2006
What we will review? 1. From modernization to structuralism to dependency 2. Review of Structuralism 3. Introduction to dependency theories 1. From structuralism and Marxism to dependency 2. Main features 3. Development of underdevelopment 4. Dependency as methodology 4. A critical perspective of dependency theories
1. From modernization to structuralism to dependency Modernisation Theory (Rostow) The Third World is underdeveloped because of the retarded and incomplete formation of its capitalist institutions. Structuralism (ECLA) Existing economic structures, domestic and international, are the immediate cause of under-development. Import Substitution is the way to structural change and economic development. Dependency Theories The wealthy nations of the world need a peripheral group of poorer states to remain wealthy. Thus, the economies of the peripheral countries are dependent on those of the developed countries. Radical Nationalism (Sunkel) Dependency School (Frank) Dependency as Methodology (Cardoso)
Branches of Dependency Theory Radical Nationalism Furtado and Sunkel Structuralism is reformulated by identifying and analysing the obstacles to national development and tracing through a series of causal linkages, how economic dependence is created. Furtado identified the obstacle to be the cultural dependence of the elite while Sunkel identified it to be multi-national corporations. Development of Under-development development Frank and Amin - Even if industrial growth did occur in the peripheral countries, their economies remain dependent on the world metropolitan economies for access to markets, finance and technology. Growth in these economies is developed by the world capitalist system so that these economy remains in a state of under-development. development. Dependency as Methodology Cardoso and Faletto Dependent capitalist development is possible in peripheral countries that may be subservient to development in the t countries of the centre. However, this may also lead to the breaking of existing dependency relations. Analysis is concentrated on concrete situations of dependency.
2. Review of Structuralism Since the 1930s Latin America changed from a group of free-trading economies to one of highly protected economies Their new political economy was based on the following: A.- all major industrial countries had industrialized behind high protective p tariffs; B.- a country needed to develop a mature industrial structure before e it could become involved in the free trading of manufactured goods; C.- protective policies should promote a wide rather than a specialized ized range of industries; D.- protective policies create more opportunities of employment at a time of rapid growth in both national populations and labour markets; ECLA argued that colonization transformed former colonies economies in structures specialised in producing raw materials, cash crops and a foodstuff at low prices, to meet the needs of the colonizer s economies By the 1950s the above became formalized in ECLA STRUCTURALISM CENTRE -PERIPHERY IMPORT-SUBSTITUTION INDUSTRIALIZATION
2.1. Centre - Periphery model Centre Periphery Rich, industrialised countries Benefit from international trade (United States and Western European industrialized societies) Poor countries No significant benefit from international trade ( Latin America, India, newly decolonized societies and the colonies in Asia and Africa) Created an unbalanced process of development 1) Deterioration of the terms of trade 2) Barries to development
2.2. Import Substitution Industrialisation Former colonies and non-industrialized nations were structurally different from industrialized countries different recipes for different from industrialized countries different recipes for economic modernization. Developing countries should initiate an industrialization process based on the protection of the domestic industries over a long transition periods. The object of development is the structural transformation of underdeveloped economies to permit a process of self- sustained economic growth break away from reliance on foreign demand for primary exports as the engine of growth, moving to a supply-side side dynamic to be provided by an expanding domestic industrial sector (ISI).
Industrialization strategies Industrialization via import substitution: : aims at replacing industrial imports by domestic production (inward looking). Industrialization via export substitution: : aims to replace the export of primary products with the export of non-traditional products (outward looking). Stages of industrial development by ECLA 1- consumer goods 2- durable consumer goods 3- basic intermediate products 4- development of domestic technology
3.1. From structuralism and marxism to dependency Structuralism (ECLA) Marxism (capitalist development) Structural relations between national and international economies. Society in these countries is economically fractured ECLA did not take into account: -the asymmetric relation between classes -the imperialist relationships among countries - the social process non determined by economic factors Dependency Theories Dimension of structures of power and economic interest of groups to explain the hegemony and international relations Marxism states there is - a historical determinism in the characterization of the power relations - tends to define rigid stages in capitalist development
3.2 Main Features Became popular in the 1960s & 1970s as a criticism of Modernization ion Theory that failed to explain poverty in large parts of the world. States that poverty of the countries in the periphery is NOT because they are not integrated into the world system (or not 'fully' integrated ted as argued by free market economists) but because of HOW they are integrated into the system. The wealthy nations of the world need a peripheral group of poorer states in order to remain wealthy. The economies of the poorer, peripheral ral countries are, therefore, dependent on the economies of the wealthier, developed countries. This state of dependency is multifaceted, involving economics, media m control, politics, banking, education, sport and all aspects of human development. Dependency approach assigns priority to the analysis of: a) mechanisms and processes of domination through which existing structures are maintained (both national and international); b) forms of dependency ency creating mechanism of self-perpetuation and the possibilities of change.
Pre-cursor to Dependency Theory Paul Baran (1957) Advanced nations form alliances with pre-capitalistic domestic elites. They then have easy access to domestic resources and maintain traditional modes of surplus extraction. Most surplus is expropriated by foreign capital and some surplus is squandered on luxury consumption by traditional elites. No Third World country can now expect to break out of a state of economic dependency and advance to an economic position besides the major capitalist industrial powers. Formal Definition of Dependence Dos Santos (1970) Dependence is a conditioning situation in which the economies of one group of countries are conditioned by the development and expansion of others. A relationship of interdependence between two or more economies or between such economies and the world trading system becomes a dependent relationship when some countries can expand through impulsion while others, being in a dependent position, can only expand as a reflection of the dominant countries, which may have positive or negative effects on their immediate development.
3.3. Development of Underdevelopment André Gunder Frank (Dependent Accumulation and Under-development, development, 1978) Areas in the periphery have been incorporated into the world economy since early stages of their colonial periods. Such incorporation has transformed these economies and transformed them into capitalist economies though not necessarily brought about capitalist economic development. Integration of these into the world economy is achieved through an interminable metropolis-satellite satellite chain in which surplus generated at each stage is extracted by the metropolis or core. The development of the core necessarily requires the under-development development of the periphery There is no real possibility of sustained development within this s system so a peripheral country has to either break completely with the metropolis polis-satellite satellite network through socialist revolution or continue to under-develop develop within it.
World System of Capitalism The American sociologist Immanuel Wallerstein in his 1987 publication, World-System Analysis,, argues that the world is much too complicated to be classified as a bimodal system, with only cores and peripheries. World systems theory advances the belief in the semi-periphery, which creates a tri- modal system consisting of the core, semi-periphery, and periphery. There are many ways to attribute a specific country to the core, semi-periphery, or periphery. Piana (2004) defined the "core" as made up of "free countries" dominating others without being dominated, the "semi-periphery" as the countries which are dominated (usually but not necessarily by core countries) while at the same time they dominate others (usually in the periphery) and "periphery" as the countries which are dominated. Its implication suggests establishing a truly democratic world, in which all oppressed peoples should be united, and that the present system of development is unsustainable with the inevitability of collapse due at some point in the future. Andre Gunder Frank extended the theory to claim that there is really only one world system which includes Asia, Europe and Africa. He states that the e centre of this system has always been in Asia and that Europe only prospered when the Asian economy was in its contracting phase of long-term economic cycle and Europe had access to virtually free silver and gold from the Americas.
Case Study of India To prove & disprove the Development of Under-development development By the late 19th century, Indian economists had introduced the concept c of drain : the transfer of accumulated surplus prevented India from making its s own capital and in the absence of indigenous fixed capital, trade was bound to be dominated by the established industrial power. The Indian Nationalist cause was integrated with the economy of common Indians. The first Non-violent resistance against the British in 1919 was by desperately y poor farmers forced to grow cash crops (indigo, tobacco, cotton) instead of food, f paid bare subsistence wages for their produce and then, additionally, had to pay taxes. Between 1815 and 1832 the value of Indian cotton goods exported fell from 1.3million to below 100,000. In the same period the value of English cotton n goods imported into India rose from 26,000 to 400,000. By 1850, India which had for r centuries exported cotton goods to the whole world, was importing one-fourth of all British exports. At the end of colonial rule, India had one of the poorest economies in the developing world, with industrial development stalled, agriculture unable to feed a rapidly growing population, one of the world's lowest life expectancies, and low rates of literacy. It was estimated that her share of world income fell from 22.6% in 1700,, comparable to Europe's 23.3%, to a low of 3.8% in 1952. Market economists cite India as disproving Dependency theory - pointing to the improvement of India's economy after moving from state-controlled business (annual growth rate of about 3.5% from 1950 to 1980) ) to open trade (8.9% growth rate in 1st quarter 2006 2007). 2007). It is now the second fastest growing major economy in the world.
3.4. Dependency as Methodology Cardoso and Faletto (Dependency and Development in Latin America, 1979) Scheme of analysis to evaluate the possibility of a shift in L-A L A into a more integrated and egalitarian development. Focus on specific contexts and internal dynamic, not on general development theories. Comparison of different L-A L A countries since decolonisation until 1970s External and internal forces forming structural links functional to interests between local dominant classes and international ones. The hierarchy that exists in society is the result of domination n structures organizing the production of material and spiritual life (i.e. State S as a instrumental tool of dominant classes)
3.4. Dependency as Methodology Main elements to take into account in the analysis 1. The economic determinants of the international market (including international equilibrium of power) 2. The structure of the national system of production and its links to the external market 3. The historic-structural structural configuration (mechanisms of distribution and maintenance of power) 4. The socio-political movements and processes that exert pressure towards the change in structures.
3.4. Dependency as Methodology Dependency Underdevelopment Domination Structures with the external market that limits the possibilities of accumulation and expansion of national capital Different position within the same international economic structure and different ways in which the dominant internal groups linked to the external market The need to study each particular power relations from a interdisciplinary, historical, and economical perspective to understand dependency makes the creation of a general theory an almost impossible task. Thus, in this framework there is no capacity of prediction or to elaborate recipes of policies.
4. A critical perspective Palma s Critique Reinforces the mechanical determination of the internal by external structures through the construction of a mechanico-formal model ignoring class relations Laclau s Critique Believes that in order to proof that all the periphery is capitalist, Frank needs to use the concept of capitalism in a sense that is erroneous from a Marxist perspective, and useless for his central proposition (that a bourgeois revolution in the periphery is impossible). Brenner s Critique Like Adam Smith - Frank, Wallerstein & Sweezy conceive of (changing) class relations emerging from the world capitalist system. Smith thought that would produce economic development and Frank et al think it would produce economic backwardness. Both ignore class struggles that are shaped by factors beyond those of mere market forces and how these changing class relations can affect economic development. Dos Santos Critique Rather than being one of satellization, it is a case of the formation of a certain type of internal structures conditioned by international relationships of dependence. Dos Santos emphasizes the differences and discontinuities between the different types of dependency. Lall s Critique The characteristics to which underdevelopment in dependent countries is generally attributed are not exclusive to these economies, but are also found in non-dependent economies and are, therefore, characteristics of capitalist development in general and not necessarily essarily only of dependent capitalism.
Some final question for debate? Would it be possible to formulate policies to promote the ideas behind these theories? Would the State and the Markets have the capacities to implement them? Does the centre periphery classification still hold?
That s All, Folks!