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International Dependence

• During the 1970s “international dependence model” gained increasing support, especially among the intellectuals of developing countries. While this model went out of favour in the 1980s and 1990s, versions of it have enjoyed resurgence in recent years as some of its views have been adopted by supporters of anti-globalization movement

• Essentially, international dependence models view developing countries as beset by institutional, political and economic rigidities, both domestic and international, and caught up in a dependence and dominant relationship with rich countries.

• The dependency school have three major streams of thought, the neo-colonial dependence, the false paradigm model, and the dualistic development thesis.

The neo-colonial dependence model:

• This approach is basically derived from Marxist literature. It attributes the existence and continuance of underdevelopment primarily to the historical evolution of a highly unequal international capitalist system of rich country-poor country relationship. This unequal relationship between the centre (the developed countries) and the periphery (underdeveloped countries) hinders poor nations

• The neo-Marxist, neo-colonial view of underdevelopment attributes poverty of underdeveloped world to the existence and policies of the industrial capitalist countries and their extensions in the form of small but powerful elite or compradore group or class in the underdeveloped countries.

• The compradore class includes certain big landlords, industry owners, traders, military and civil top bureaucrats, professionals and union leaders. There is a convergence of the interests of comprador elite with the

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interests of financial and industrial elite of developed nations. The comprador group serve to inhibit any genuine reform efforts that might benefit the wider population of underdeveloped countries and, due to this service, the group is rewarded by the international interest groups including MNC, aid agencies, World Bank and IMF, which are tied allegiance or funding to wealthy capitalist countries.

Dependent capitalism

• “Underdevelopment is a particular form of capitalist development known as dependent capitalism…..Dependence is a conditioning situation in which the economies of one group of countries are conditioned by the development and expansion of others

• According to Samir Amin the contemporary global system is characterized with monopoly of technology, financial capital, natural resources, mass media and strategic weapons. The system is highly polarized due to lack of global political and social organizations, economic system to meet the requirements of industrialization in periphery economies, unequal income distribution and poverty.

The false paradigm Model

• According to this approach the relationship of international dependence is strengthened through inappropriate and faulty advice provided by international “experts” or “advisors” from developed countries assistance agencies and multinational donor organizations. These so called experts offer sophisticated concepts, elegant theoretical structures, and complex econometric models of development, which often lead to inappropriate or incorrect policies.

• certain intellectuals, trade unionists, high level government economists, and other civil servants all get their training in developed country institutions, where they are unintentionally served an unhealthy dose of alien concepts and elegant but inapplicable theoretical models. Having little

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or no really useful knowledge to enable them to come to grip in an effective way with real development problems, they often tend to become reluctant apologists for the existing system of elitist policies and institutional structures.

The dualistic development model:

• The notion of dualism is explicitly discussed in international dependence theory.The concept is based on unequal distribution of wealth within and across nations. It represents the existence and persistence of increasing divergences between rich and poor nations and rich and poor people on various levels.

• The concept of dualism embraces four key arguments: • Coexistence of “superior” and “inferior” in a given space. For example

Lewis’s notion of coexistence of modern and traditional method of production, coexistence of highly educated wealthy elite and masses of illiterate poor people, coexistence of powerful and wealth industrialized nations with weak, poor peasant societies in international economy.

• The coexistence is chronic and not merely transitional. The international coexistence of wealth and poverty is not simply a historical phenomenon that time could eliminate the discrepancy between “superior” and “inferior”.

• The difference between wealthy and poor is not decreasing but increasing over time. For example the productivity gap between workers in developed countries and in most underdeveloped countries seems to widen with each passing year.

• The interrelationship between wealthy and poor is not based on cooperation but on antagonism. There seems to be no “trickle-down effect

Baran: Neo-Marxist Analysis of Economic Development:• According to his understanding Marx considered industrial countries like

England and Sweden matured for transformation into socialist states. Socialism in backward and underdeveloped countries has a powerful tendency to become a backward and underdeveloped socialism

• For a socialist society in the advanced countries would not be compelled to engage in “force marches” towards industrialization, or bound to withdraw from popular consumption large parts of low incomes, or constrained to

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devote to military purpose significant share of small aggregate output. Such a society would not only attack the waste, irrationality, and cultural and moral degradation in the West, it would also strive to solve the problems of wants, disease and starvation in the underdeveloped countries.

• According to Baran economic development depends on the class struggle. Society has to be transformed, as certain classes and groups obstruct change while others advance it. An economy based on comprehensive economic planning can function and grow without the benefits of private enterprise. The dominant interests of advanced capitalist countries are inimical to economic development in the poor countries, because the latter are indispensable as the hinterlands of capitalism, supplying it with raw materials, profits, and investment outlets.

• The present problems in the poor countries are that actual economic surplus are much smaller than the potential surpluses, and much of the surplus is wasted in lavish consumption rather than being used to promote development.