Abstract
The purpose of this paper is to discuss dependent development theory that emerges from dependency theory of development. The paper starts with the brief revision of dependency theory of development that enables to apprehend the new emerging theory of dependent development which is the center of discussion in this paper. The paper then reviews how third world countries can still develop in an arrangement of dependency to developed countries resources by using dependent development theory. Finally, the paper will point out the emerging relevance of the dependent development theory in developing economies today.
Conception of development under dependence analysis
In 1950s and 1960s the concept of development was dominated by dependency theory explanation because of global changes in demand resulted from a new international division of labor whereas peripheral countries namely; Africa, Asia and Latin America specialized in primary production and dominated by importation of consumer goods from western countries. Production and consumption benefited a few populations in periphery countries especially ruling class who cooperated with developed countries leading to a peripheral capitalism and dependent transformation from outside countries (Wayne, 2006). Andre Gunder Frank was one of the classical dependency theorist that regarded state as weak to control internal affairs, thus emerging of the new strand based on dependent development come to challenge the notion of weak state by developing the concept of strong state in controlling internal affairs and moderating the relationships between core and developed countries.
Dependent development analysis
Then dependent development theory emerged as a response to changes existed in in the nature of international economic exchange in 1970s which was regarded as core to periphery relations since 1960s (Wayne, 2006). Cardoso, Faletto, Gereffi and Evans are among of pioneers of the dependent development theory whereby they emphasize that the recent tendency for transnational firms to invest in industrial production in non-core countries makes it necessary to draw a distinction between classical dependency and newly emergent form of dependent industrialization in relationships between developed and third world countries (Bradshaw, Kim& Bruce, 1993). According to Evans (1979), Dependent Development simply means “a condition where dependency, economic growth and economic diversification exist at the same time”. He says however “dependent development is not, it should be stressed, the negation of dependence. It is rather dependence combined with development.” again he went further on emphasize that, only semi-periphery countries can achieve the status of true dependent development. In regards, the applicability of dependent development to third world countries should relies on combination of economic dependency and economic growth rather than triple alliance that may lead to uneven growth that can happen in selective sector of the economy (modern sectors). Thus, dependent development should not negate dependence but dependence combined with development.The need of strong state to manage internal and external affairs in the concept of dependent development was imperative to manage the relations. To extend the discussion on dependent development theory, Gereffi (1989) compliment to the theory by focusing on transnational economic linkages namely; foreign trade, foreign aid, direct foreign investment and foreign loans and the role of the state in dependency management. Thus, it makes a critical evaluation in the distinction between rapid economic growths experienced in new industrialized countries in 1960s and 1970s and the difficulties existed in Latin America nations to maintain their previous economic growth by 1970s as a result of adopting different path to development. In regards to this concept, dependent development in third world countries should enshrine and focus on national development strategies(Bradshaw, Kim and Bruce, 1993). To sum up, the interaction between international and international forces, polity and economy and between state and various international linkages will be the basis on attaining dependent development to third world countries and fulfillment of human capabilities and capacities that produce human society that can nature human flourishing.
The major strand of dependent development is the existence of the so–called “triple alliance’’ which comprises foreign capital, local capital and the domestic state. Briefly, Foreign capital involve; external investment, trade, capital and technology. Next are local capitals which include local people who have local channels, connections and knowledge of the local market. Then lastly is the state, where by dependent development theorists argued that state must be relative strong visionary, negotiating with foreign investors by creating rules to ensure investment is being protected and creating local investors. All these issues third world countries not only demanded but required to embrace so much so that to enhance modern sector especially industrial development.
On the other hand since third world countries characterized with low level of science and technology, low production, low gross domestic product (GDP) and less industrialized compared to the developed countries, the dependent development theorists call upon for transnational economic linkages so much that third world countries can develop in an arrangement of dependency to developed countries resources. These transnational economic linkages according to Gereffi (1989), include; foreign aid, foreign direct investment, foreign trade, foreign loans and the role of the state in dependency management. Now to clarify further with reference to dependent development the following are the argument which shows how third world countries can still develop in an arrangement of dependence to developed countries resource as follows.
First, the role of the state since most of the states in third world countries are considered to be weak in term of governance and inability to set effective government policies which shape domestic sphere and country’s relationship with external countries. Dependent development theorists call upon states in third world countries to be relative strong. This implies ability of the state to negotiate with foreign investors and setting micro economic strategies or measures based on laws to govern investment which is protected and also states must create the local investors by providing them with better environment which will attract them. According to Gereffi and Wyman (1990), states must focus on “nation’s development strategies which links policies and production structures in a such way as to shed light on a country’s relationship to international markets and resources and on its decisions about economic growth and equity’’. This is to say that, weak states cannot formulate efficient and effective strategies of state-led industrialization. So, the third world countries can still develop in an arrangement of dependency to developed countries resources if only their states are strong and not weak simply because to Evans (1979), weak states do not possess the resources or strength to follow a path of dependent development.
Second, integration between economic dependency and economic growth, the widespread of third word counties namely; Africa, Asia, Latin America, Middle East and the Caribbean constitutes of low per capita income countries that focus on economic development or economic growth. These terms are simultaneously dependent to each other but they are not identical, thus economic growth focus on increase in a county’s production or income per capita while economic development focus on economic growth accompanied by change in output distribution and economic structure (Wayne, 2006:15). Indeed, these concepts have captured the debate of development and dependency since 1960’s. Economic dependency connotes an explanation of economic development of a state in term of external influence (Sunkel, 1969).To explain the integration between economic dependency and economic growth in third world countries development is context sensitive in the new strand of dependency theory namely dependent development theory focusing on the change of international economic exchange that challenge the classical dependency strand that regard state as epiphenomenal that there is nothing to explain in term of state while dependent development theorist place state (strong state) at the center for moderating relationship between the core and third world countries (Bradshaw, Kim and Bruce, 1993).
The relationship between the center and third world countries in the concept of dependent development theory is non-zero sum game (Cohen, 1973:217). And the integration between economic dependency and economic growth in a global economy will be rooted in the relationships between foreign economic linkages, local elites and the state, thus this model of integration will focus on dependency combined with development through different path like reliance on foreign aid and trade as experienced in Latin America countries such as Mexico, Brazil and Argentina and involvement in transnational corporations a model of East Asia Countries such as South Korea, Taiwan Hong Kong and Singapore and in Africa, Kenya increased manufacturing sector in 1989 through foreign investment and remained dependent on raw material exports (Bradshaw, Kim and Bruce, 1993). For instance, Evans (1979) point out the difficult of foreign companies to establish a market in third world countries whereas, require a close collaboration between foreign companies and local firms because they are capable of understanding the market and commercial network within their countries. The applicability of this relation is evident when local elites coordinate and integrate the activities of multinational companies within their locality.In arrangement of dependent development theory, the integration between economic dependency and economic growth in third world countries will require a strong state to manage dependency through domestic institutions to use external economic resources optimal, productively and selectively to enhance national advantage and focus on nation development strategies which will link policies and production structure of a country relationships in international market and resources as well as shaping the decision on domestic economic growth (Gereffi, 1989).
Third, the use of comparative advantage as a path to development, whereas the concept of this model is developed from the theory of comparative advantage developed by David Ricardo. Comparative advantage is based on trade exchange concept that connote the ability of a party (a firm or a country) to produce particular goods or services efficiently at a lower opportunity cost than another party (Ricardo, 1817). The model of Comparative advantage explains how trade can benefit both side namely developed and third world countries in term of gains from trade. Trade exchange between developed and third world countries may benefit both parties in the context of state-led dependency management. Third world countries such as the entire area of Africa mostly possess factors of production such as land and labor while developed countries they have power of resources and technology that can be used as means to trade for a comparative advantage. Thus for comparative advantage to correspond with dependent development theory, gain from trade should focus on nation development strategies(Bradshaw, Kim and Bruce, 1993). For instance the prosperity of Mexico has been contributed by North American Free Trade Area (NAFTA) in which the United States of America (USA) and Mexico agreed to trade on the basis of comparative advantage (Villarreal, 2017). Using comparative advantage, third world countries in arrangement of dependency to developed countries resources can develop through specializing in export of raw material so as to increase manufacturing sector through foreign investment and trade.
Relevance of dependent development
In regards of the above discussion, dependent development theory has some sort of relevance to the contemporary dependency developing economies simply because the idea of having a strong state as a means to facilitate and forming strategies for development thus, the state was regarded not insulted or autonomous but a place whereby different actors such civil social groups come together and generate strategies for change. This is relevant in the contemporary globalization of capital by global civil society that exists to compliment the state in development strategies such as building private schools and university like African Institute for Development Policy in Kenya and hospitals. For instance across Africa there is Africa Fair Trade Network Operating (Fairtrade) in Kenya, African Forum and Network on Debt and Development (AFRODAD) in Zimbabwe, Center for Development Support Initiatives (CEDSI) in Nigeria and Word Action Fund in Uganda, all of these they forms civils society on trade and development for Africa.
Generally, it is interesting for Third World countries to develop in an arrangement with dependency to developed countries resources on the basis of dependent development theory by working on developmental perspective and embracing interventionist state perspective that correspond to state-led management of transnational economic linkages in attaining dependent development.
REFERENCES
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