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Dependency theory as a reaction to the modernization theory.

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1. Summary
2. Statement
3. Case study
4. Discussion
5. Conclusion

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Development and underdevelopment as 2 sides of the same coin

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Development and underdevelopment as 2 sides of the same coin

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Development in the North = underdevelopment in the South
- Development in the South is affected by structural constraints caused by effects of development in the South.
- Power relations determine the international division of labour.
- International economy is not neutral, but the result of capitalist expansion, with North-South power differences
- Adverse international position of South in world system responsible for negative internal social structures.
- Capitalism as a driver for underdevelopment.

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- Imperalism/colonialism are a root for the development problem --> structural inequalities in the world economy are created by the European expansion process.
- Unequal exchange: core and
periphery do not both benefit from exchange (trade).
- Compradors: peripheral bourgeoisie as agents of core interests --> focus on trade instead of production and are dependent on foreign markets.

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- Mechanistic views: structure is everything, little appreciation for ‘agency’.
- Analytically outdated.
- Division between North/South has changed.
- Few solid empirical analyses.

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In this part we are going to discuss the following statements. Each member of the group will vote against or in favor of the statement, elaborating their position.

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Without development in the North there would have been no possibility for Southern countries to develop.

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The South is to blame for their own underdevelopment. If they had coped different with the influences from the North they could have developed better.

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The South is structured in a process of underdevelopment, created by development in the North, in which the South has no agency.

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Capitalism has a negative impact on the way development is shaped in the North.

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A leading role of the state in the development process is crucial for the process to succeed.

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As a post-colonial country Rwanda is dependent on the US. The country has very little natural resources and small local markets. Therefore, the country is dependent on international aid and foreign investments to manage its economy. The US emerged as one of the most important donors cum source of aid and FDI into Rwanda. Although Kagame is trying to wean the economy away from this overreliance on foreign aid, Rwanda remains an aid-dependent country. Because of Rwanda's short-term economic outlook, the country has whitnessed a rise in foreign debt. This extra expenditure on debt servicing makes it impossible for the country to  move away from foreign aid dependence. In this bilateral relationship, Rwanda is clearly not the dominant partner because it needs the US to support its economy. Therefore, Rwanda must find avenues to keep the US interested.

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Free-market policies will not work due to structural constraints: is ‘delinking’ an option?

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Can globalization be seen as a positive contribution to development, or has it increased worldwide inequalities even more?

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Should all countries move away from international trade and focus more on their local markets? Maybe to soften competition for the Southern countries?

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Is there a way in which eventually the North and South will reach an equal level of development? Is there a way, in which in development in the North will slow down and the development in the South will increase faster?

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Dependency theory is the notion that resources flow from a "periphery" of poor and underdeveloped states to a "core" of wealthy states, enriching the latter at the expense of the former. It is a central contention of dependency theory that poor states are impoverished and rich ones enriched by the way poor states are integrated into the "world system".