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8.6H: Dependency Theories

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    8189
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    Dependency theory states that colonialism and neocolonialism have created unequal economic relations between poor and wealthy countries.

     

    LEARNING OBJECTIVES

     

    Explain malnourishment and hunger in the “third world” through dependency theory

     

    KEY TAKEAWAYS

    Key Points

     

    • In the past, colonialism allowed wealthy countries to plunder their colonies for material benefits—raw materials like rubber, sugar, and slave labor.
    • Today, poor countries have taken enormous loans from wealthy countries in order to stay afloat. Paying off the compound interest from this debt prevents them from investing resources into their own country.
    • Foreign trade gets in the way of local governments’ ability to improve the living conditions of their people by encouraging the export of food and other raw materials to wealthy consumer markets.

     

    Key Terms

     

    • foreign trade: The exchange of capital, goods, and services across international borders or territories.
    • foreign debt: A debt that a country, an organization in a country, or a resident individual in a country owes to those in other countries.
    • neocolonialism: The control or domination by a powerful country over weaker ones (especially former colonies) by the use of economic pressure, political suppression, and cultural dominance.
    • dependency ratio: an age-population measurement of those typically not in the labor force (the dependent part) and those typically in the labor force (the productive part)

    Dependency theories propose that colonialism and neocolonialism —continuing economic dependence on and exploitation of former colonial countries—are the main causes global poverty. Countries have developed at an uneven rate because wealthy countries have exploited poor countries in the past and continue to do so today through foreign debt and foreign trade.

     

    Historical Dependency

     

    Historically, wealthy nations have taken a great quantity of materials from poor countries, such as minerals and metals necessary to make automobiles, weapons, and jewelry. Large amounts of agricultural products that can only be grown in the hot climates of the poor countries, such as coffee, tea, sugar, and cocoa, have been exported to and manufactured in the wealthy countries. Wealthy countries would not be as rich as they are today if they did not have these materials. Wealthy countries increased their own profits by organizing cheap labor through slavery.

    King Leopold II, for example, who was King of Belgium from 1865-1909, forced hundreds of thousands of men, women, and children to work as slaves in the Democratic Republic of Congo. The invention of the bicycle tire in the 1890s and later the automobile tire meant that rubber was in high demand; wild rubber vines were widespread in the Congo, earning Leopold millions. The Democratic Republic of Congo is still suffering from the plunder of natural resources, torture, and killing that was endured during Leopold’s reign.

     

    Modern Dependency

     

    Today, poor countries are trapped by large debts which prevent them from developing. For example, between 1970 and 2002, the continent of Africa received $540 billion in loans from wealthy nations—through the World Bank and IMF. African countries have paid back $550 billion of their debt but they still owe $295 billion. The difference is the result of compound interest. Countries cannot focus on economic or human development when they are constantly paying off debt; these countries will continue to remain undeveloped. Dependency theorists believe large economic aid is not necessarily the key to reducing poverty and developing, but rather debt relief may be a more effective step.

    In addition, foreign trade and business often mitigate local governments’ ability to improve the living conditions of their people. This trade often comes in the form of transnational corporations (TNCs). The governments of poor countries invite these TNCs to invest in their country with the hope of developing the country and bringing material benefit to the people. However, workers’ time and energy are often poured into producing goods that they themselves will not consume. For example, some of the land in Cape Verde could be planted and harvested to feed local people, but it is planted instead with cash crops for foreign exchange. Fresh produce is regularly sold or changed to a nonperishable type such as tuna canned for export rather than consumed by the population.

     

    Malnutrition and Dependency

     

    Widespread malnutrition is one of the effects of this foreign dependency. This is common around the globe. Brazil is the second largest exporter of agricultural products, but 50 percent of its population is malnourished. Although Ethiopia has one of the largest populations of cattle in Africa, much of the population suffers from malnutrition and the government continues to export large numbers of cattle to the Middle East. Even during the peak of the infamous 1985 famine, the government was sending dried meat to Egypt.

    Through unequal economic relations with wealthy countries in the form of continued debts and foreign trade, poor countries continue to be dependent and unable to tap into their full potential for development.

    image

     

    Map of Empires and Colonies: 1800: By the end of the 19th century, most of the Americas were under the control of European colonial empires. At present, much of South and Central America is still economically dependent on foreign nations for capital and export markets.