Describe dependency theory and delineate its salient features

Dependency theory is a critical theory that emerged in the 1950s and 1960s as a response to the limitations of modernization theory in explaining the persistent underdevelopment of many countries in the Global South.

Developed by scholars from Latin America, Africa, and Asia, dependency theory challenges the idea that all countries follow a linear path of development and argues that the global capitalist system perpetuates the underdevelopment of peripheral countries through unequal economic relations with core countries. Here are the salient features of dependency theory:

1. Unequal Economic Relations: Dependency theory posits that the global capitalist system is characterized by unequal economic relations between core and peripheral countries. Core countries, which are typically industrialized and economically advanced, dominate and exploit peripheral countries, which are primarily agrarian, resource-dependent, and economically underdeveloped. This unequal exchange is perpetuated through mechanisms such as trade imbalances, unequal terms of trade, and the extraction of surplus value from peripheral economies.
2. Historical Legacy of Colonialism: Dependency theorists highlight the historical legacy of colonialism as a key factor shaping the underdevelopment of peripheral countries. Colonialism laid the groundwork for the unequal economic relations between colonizers and colonized, with core countries exploiting the natural resources, labor, and markets of peripheral regions for their own benefit. Even after formal political independence, peripheral countries remain economically dependent on core countries due to inherited structures of domination and exploitation.
3. Structural Underdevelopment: Dependency theory argues that underdevelopment is not a result of internal deficiencies or cultural backwardness but rather a structural condition embedded within the global capitalist system. Peripheral countries are structurally disadvantaged in the international division of labor, relegated to producing raw materials and low-value goods for export to core countries. This dependence on primary commodity exports perpetuates economic vulnerability, volatility, and stagnation in peripheral economies.
4. Dualistic Development: Dependency theorists emphasize the persistence of dualistic patterns of development within peripheral countries, characterized by stark socio-economic inequalities between a small elite class and the majority of the population. The concentration of wealth, power, and resources in the hands of a privileged few exacerbates poverty, social exclusion, and political instability, perpetuating a cycle of underdevelopment and dependency.
5. Importance of External Intervention: Dependency theory underscores the role of external intervention, particularly by core countries and multinational corporations, in shaping the economic policies and development strategies of peripheral countries. Core countries and transnational corporations exert influence through mechanisms such as foreign aid, loans, investment, trade agreements, and technology transfer, often reinforcing dependency and hindering local autonomy and self-determination.
6. Call for Structural Transformation: Dependency theory advocates for structural transformation and economic diversification in peripheral countries to break free from dependence on core countries and overcome the legacy of underdevelopment. This includes promoting import substitution industrialization, agrarian reform, state-led development planning, regional integration, and South-South cooperation to build more autonomous and equitable economies.

In summary, dependency theory offers a critical perspective on the global capitalist system, highlighting the unequal power relations, historical legacies of colonialism, structural underdevelopment, and dualistic patterns of development that perpetuate the dependence and exploitation of peripheral countries. By challenging dominant narratives of development and advocating for structural transformation, dependency theory seeks to empower marginalized countries and promote more equitable and sustainable forms of development.