Dominance-Dependence and World Systems Approach views of development

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A slideshow for Yr 12 Geography on one of the main "schools of thought" of Development theory

Transcript of Dominance-Dependence and World Systems Approach views of development

  • Alternative Views of DevelopmentDominance Dependence TheoryWorld Systems Approach

  • Dominance Dependence Theoryor Dependency Theory (not the Domino Theory!)late 1950s Director of the UN Economic Commission for Latin America, Raul PrebischEconomic growth in industrialised countries did not necessarily lead to growth in the poorer countries in fact it often led to serious economic problems in the poorer countries This was NOT what the traditional models eg Rostow had predicted!

  • Rostow (recap)timelevel of developmentThe TraditionalSocietyPre-conditions for Take OffTake OffHigh MassConsumptionThe Drive to MaturityEveryone wins in the end! or do they?

  • Dominance Dependence TheoryPoor countries export primary commodities to the rich countries: eg rubber, ironRich countries manufacture products out of those commodities and sell them back to the poorer countries:eg steel-belted radial tyres,

  • Value AddedThe market value of a manufactured product is nearly always greater than the cost of the primary resources used to create the product

    eg the retail cost of a tyre is much greater than the value of the rubber and steel in the tyre= PROFIT

  • Width of arrows represents the value of exports

  • Trickle Up

  • DisparityThe poorer countries will never be able to earn enough to pay for their imports or the interest on the loans they take out to develop (ie try to catch up with the richer countries) so there will always be Disparities between Developed and Developing countries (as long as the system continues like this!)

  • Solution!!?Poorer countries should embark on a programme of import substitution* so they dont need to purchase manufactured products from the richer countries. The poorer countries would still sell their primary products on the world market and be able to compete in the market* Import Substitution: a country should attempt to reduce its foreign dependency through the local production of industrialized products. This usually involves government spending to encourage the development of local industry through direct incentives, tax breaks, duties, quotas and tariffs (all of which are today frowned upon as being barriers to free trade. NZ removed all of its barriers from 1984 onwards.

  • UnfortunatelyInternal markets of the poorer countries were too small to reach the economies of scale needed to keep prices low. Poorer countries often lacked the political will, expertise or infrastructure to move from being producers of primary products to being industrial manufacturers

  • UnfortunatelyThe international commodity markets (eg for coffee) control and determine price and quantity of primary products soldProtected / nationalised industries are fertile breeding grounds for corruption and inefficiency in developed and developing countries.

  • Persistent poverty why?Rostow: poorer countries are late in coming to solid economic practices. As soon as they learn the techniques of modern economics the poverty will begin to subside. ie catch up!

  • Alternative viewsMarxist theorists: persistent poverty is a consequence of capitalist exploitation. Disparities in development are a natural product of global capitalism, which itself grew out of the age of ImperialismMarx and other socialist / communist thinkers viewed society as being engaged in an ongoing class struggle between rich and poor which would only be solved by the forced redistribution of resources (eg by revolution, war or economic upheaval).

  • Marxism: a class struggleRichHavesControl most factors of production (Land, Capital, Entrepreneurship)Industrialists / BossesLandownersBourgeoisieUpper classesPoorHave-notsControl only their own labour but cant fix their price (wages) as they lack powerWorkersLandless peasantsProletariatWorking / peasant classesPolitical power grows out of the barrel of a gun Mao Zedong, 1938Based on the writings of Karl Marx (1818 1883) in The Communist Manifesto

  • Dominance Dependence TheoryCan be seen to borrow some of these ideas in that it recognises the unfairness of the disparities and that the capitalist system seems to be unable to solve these problemsWorld Systems Approach: A more recent view which says that poverty is a direct consequence of the evolution of the international political economy into a fairly rigid division of labour which favours the rich and penalises the poor.

  • Dominance Dependence Theory[Dependency is] historical condition which shapes a certain structure of the world economy such that it favours some countries to the detriment of others and limits the development possibilities of the subordinate economies...a situation in which the economy of a certain group of countries is conditioned by the development and expansion of another economy, to which their own is subjected.

    Theotonio Dos Santos, "The Structure of Dependence," in K.T. Fann and Donald C. Hodges, eds., Readings in U.S. Imperialism. Boston: Porter Sargent, 1971, p. 226

  • Dominance Dependence TheoryTwo sets of states:Dominant or Centre Countries*Periphery = out on the edges or margins #OECD = Organisation for Economic Cooperation and Development (NZ is a member)Dependent or Periphery* CountriesIndustrialised countries of OECD# low GNP per capita rely heavily on the export of a single commodity eg coffee Mainly in Latin America, Asia, and Africa

  • Dominance Dependence TheoryExternal factors are of huge significance for the periphery:Dependent or Periphery Countriesmultinational corporationsinternational commodity marketsforeign aidcommunications These factors dwarf the size of most Dependent countries economies

  • Dominance Dependence TheoryDynamic but deep-seated relationships:Dependent or Periphery* Country The relationship between the two countries changes considerably over time but is still essentially of the same Dominant Dependent nature. Some of these relationships are very deep-seated: they go back over hundreds of years eg Spains relationship with its former colonies of South and Central America

  • Latin America is today, and has been since the sixteenth century, part of an international system dominated by the now-developed nations.... (eg Spain)Latin underdevelopment is the outcome of a particular series of relationships to the international system.Susanne Bodenheimer, "Dependency and Imperialism: The Roots of Latin American Underdevelopment," in Fann and Hodges, Readings, op. cit., p. 157. Dominance Dependence Theory

  • International capitalism is the motive force behind dependency relationships. ...historical research demonstrates that contemporary underdevelopment is in large part the historical product of past and continuing economic and other relations between the underdeveloped and the now developed metropolitan countries. Furthermore, these relations are an essential part of the capitalist system on a world scale as a whole.Andre Gunder Frank, "The Development of Underdevelopment," in James D. Cockcroft, Andre Gunder Frank, and Dale Johnson, eds., Dependence and Underdevelopment. Garden City, New York: Anchor Books, 1972, pDominance Dependence Theory

  • Capitalism has enforced a rigid international division of labour which is responsible for the underdevelopment of many areas of the world. Dependent states supply cheap minerals, agricultural commodities, and cheap labour, and also serve as the repositories (dumping grounds?) of surplus capital, obsolescent technologies, and manufactured goods. Dominance Dependence Theory

  • The economies of the dependent states are geared towards the outside: money, goods, and services do flow into dependent states, but the allocation of these resources is determined by the economic interests of the dominant states, not by the economic interests of the dependent states. Dominance Dependence Theory

  • Economic and political power are heavily concentrated and centralized in the dominant industrialized countries. Economic and Political power work together: dominant country governments will take whatever steps are necessary to protect private economic interests, such as those held by multinational corporations.These assumptions are shared with Marxist theories of imperialismDominance Dependence Theory

  • Got all that?

  • Underdevelopment: a situation in which resources are being used, but in a way which benefits dominant states and not the poorer periphery states in which the resources are found!Dominance Dependence TheoryTherefore

  • Poor countries are not "behind" or "catching up" to the richer countries of the world. They are poor because they were dragged into the European economic system only as producers of raw materials or as sources of cheap labour, and were denied the opportunity to market their resources in any way that competed with dominant states. Dominance Dependence TheoryTherefore

  • Patterns of resource use imposed on poor countries are wrong and should be changedeg Export Agriculture. Poor countries experience high rates of malnutrition even though they export large amounts of food (mainly cash crops eg coffee, sugar, tobacco, cocoa). Land should be used for domestic food production rather than exporting to wealthy countries.Dominance Dependence TheoryTherefore

  • There exists a clear national economic interest for each country (ie their own development goals). This national interest can only be satisfied by addressing the needs of the poor within a country, rather than meeting corporate or governmental needs (especially the corporates and governments of wealthy countries).Dominance Dependence TheoryTherefore