The
concepts of underdevelopment and development are the words of opposite. Thus ,
when development referring to the progression from the simple stage to complex
stage the underdevelopment refers to the declining from the highest stage to
lowest stage, from competitive to uncompetitive, from able to unable from
stability to instability and from goal focussing to less focusing
(Bornschier, 1992).
Development
is also characterised by variety of elements in a society thus good
transportation system, strength in currency, high agricultural and industrial
productions, and high number of elites, high science and technology and
transparent which is accompanied with
accountability of the community leaders (Tausch, 2006).
The
relationship between development and underdevelopment is so complex to the
extent that no scholar as published to show the relationship but also they are
strengthening on difference between the two elements or arena.
Dependency
theory is a body of social science theories
predicated on 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 (Amin, 1973).
Dependency
theory refers to group of theories which propose that some countries and
societies are poor, not because of their traditional culture, attitudes and
values but because they are nit dominated and exploited by the rich and
powerful countries. The theory has been
significantly influenced by Marxist theories of imperialism and was developed
to challenge modernisation theory (Bornschier V, 1992).
The theory
arose around 1970 as a reaction to modernisation theory, an earlier theory of
development which held that all societies progress through similar stages of
development, that today's underdeveloped areas are thus in a similar situation
to that of today's developed areas at some time in the past, and that therefore
the task in helping the underdeveloped areas out of poverty is to accelerate
them along this supposed common path of development, by various means such as
investment, technology transfers, and closer integration into the world market.
Dependency
theory rejected this view, arguing that underdeveloped countries are not merely
primitive versions of developed countries, but have unique features and
structures of their own; and, importantly, are in the situation of being the
weaker members in a world market economy, whereas the developed nations were
never in an analogous position; they never had to exist in relation to a bloc
of more powerful and economically advanced countries than themselves. (Bornschier V, 1992)
Dependency
theorists argued, in opposition to free market economists and modernization
theorists, that underdeveloped countries needed to reduce their connectedness
with the world market so that they can pursue a path more in keeping with their
own needs, less dictated by external pressures.
- Poor nations provide natural resources, cheap
labor, a destination for obsolete technology, and markets for developed
nations, without which the latter could not have the standard of living
they enjoy.
- Wealthy nations actively perpetuate a state of
dependence by various means. This influence may be multifaceted, involving
economics, media control, politics, banking and
finance, education, culture, sport,
and all aspects of human
resource development (including
recruitment and training of workers).
- Wealthy nations actively counter attempts by
dependent nations to resist their influences by means of economic
sanctions and/or the use of military force.
Dependency theory has been
criticized by free-market economists, who believe that the promulgation of the
theory leads to:-
1.
Corruption. Free market economy
hold that state-owned companies have higher rates of corruption than privately
owned companies.
2.
Lack of competition. By
subsidizing in-country industries and preventing outside imports, these
companies may have fewer incentives to improve their products, to try to become
more efficient in their processes, to customers, or to research new innovation.
3.
Sustainability. Reliance of
industries on government support may not be sustainable for a very long,
particularly in poorer countries and countries which largely budget out of
foreign aids.
4.
Domestic opportunity costs. Subsidies on
domestic industries come out of state coffers and therefore represent money not
spent in other ways, like development of domestic infrastructures, seed capital
and social welfare programmes.
Modernization
theorists often saw traditions as obstacles to economic growth. Furthermore,
while modernization might deliver violent, radical change for traditional
societies it was thought worth the price. Critics insist that traditional
societies were often destroyed without ever gaining promised advantages if,
among other things, the economic gap between advanced societies and such
societies actually increased. Modernization theory proposes that some countries
or societies are poor because their traditional culture attitudes and values
hinder economic development. Therefore, in order for economic development to
occur, traditional values and attitudes will need to be replaced by modern
values and attitudes (Raffer , 1993).
The net effect of modernization for some
societies was therefore the replacement of traditional poverty by a more modern
form of misery, according to these critics. Others point to improvements in
living standards, physical infrastructure, education and economic opportunity
to refute such criticisms (Bornschier, 1998).
One key factor
in modernization theory is the belief that development requires the assistance
of developed countries to aid developing countries to learn from their
development. In addition it was believed that the lesser developed countries
would develop and grow faster than developed countries. Thus this theory is
built upon the theory that it is possible for equal development to be reached
between the developed and lesser developed countries (Bornschier,
1992).
Since
dependency theory was introduced to challenge modernization theory, many would
think that were to be hardly any similarities between these two groups of
theories. It has to be noticed that both
modernization and dependency theories both are political polar opposite (one
liberal and the other radical), they have a surprising amount in common ( Raffer, 1992).
1.
Both are essentially
evolutionary, assuming that countries progress in a linear fashion and that it
is capitalism which propels them from one stage to the next.
2.
Both assume that change
comes from the top down; from the state; they ignore the ways in which people
negotiate these changes and indeed, initiate their own.
3.
Both fundamentally
deterministic and are based upon the same fundamental rationalist epistemology.
4.
Most crucially for those at
the receiving end of underdevelopment, neither offers a realistic solution.
Wallerstein characterizes the
world system as a set of mechanisms which redistributes resources from the periphery to the core. In his
terminology, the core is the developed, industrialized part of
the world, and the periphery is the "underdeveloped",
typically raw materials-exporting, poor part of the world; the market
being the means by which the core exploits the periphery (Raffer,
(1992).
Apart from these, Wallerstein
defines four temporal features of the world system. Cyclical rhythms represent the
short-term fluctuation of economy, while secular
trends mean deeper long run tendencies, such as general economic growth or
decline. The term contradiction means a general controversy in the
system, usually concerning some short term vs. long term trade-offs. For
example the problem of under consumption, wherein
the drive-down of wages increases the profit for the capitalists on the
short-run, but considering the long run, the decreasing of wages may have a
crucially harmful effect by reducing the demand for the product. The last
temporal feature is the crisis: a crisis occurs, if a constellation of
circumstances brings about the end of the system (Raffer, 1992).
In Wallerstein's view, there have
been three kinds of societies across human history: mini-systems or what
anthropologists call bands, tribes, and small chiefdoms, and two types of
world-systems - one that is politically unified and the other, not (single
state world-empires and
multi-polity world-economies).World-systems are larger, and ethnically diverse.
Modern society, called the "modern world-system" is of the latter
type, but unique in being the first and only fully capitalist world-economy to
have emerged, around 1450 - 1550 and to have geographically expanded
across the entire planet, by about 1900. Capitalism is a
system based on competition between
free producers using free labor with
free commodities, 'free' meaning its available for sale and purchase on a market.
Some questions are more specific
to certain subfields; for example, Marxists would
concern themselves whether the world-system theory is a useful or unhelpful
development of Marxist theories.
World-systems analysis argues
that capitalism, as a historical social system, has always integrated a variety
of labor forms within a functioning division of labor (world-economy).
Countries do not have economies, but are part of the world-economy. Far from
being separate societies or worlds, the world-economy manifests a tripartite division of labor with
core, semi-peripheral, and peripheral zones. In core zones businesses, with the
support of states they operate within, monopolize the most profitable
activities of the division of labor.
There are many ways to attribute
a specific country to the core, semi-periphery, or periphery. Using an
empirically based sharp formal definition of "domination" in
a two-country relationship, Piana in 2004 defined the "core" as made
up of "free countries" dominating others without being dominated, the
"semi-periphery" as the countries which are dominated (usually, but
not necessarily, by core countries) while at the same time dominating others
(usually in the periphery), and "periphery" as the countries which
are dominated. Based on 1998 data, the full list of countries in the three
regions together with a discussion of methodology can be found.
The late 18th and early 19th
centuries marked a great turning point in the development of capitalism in that
capitalists achieved state-societal power in the key states which furthered the
industrial revolution marking the rise of capitalism. World-systems analysis
contends that capitalism as a historical system formed earlier, that countries
do not "develop" in stages, but rather the system does, and these
events have a different meaning as a phase in the development of historical
capitalism; namely the emergence of the three ideologies of the national
developmental mythology (the idea that countries can develop through stages if
they pursue the right set of policies): conservatism, liberalism, and
radicalism.
Proponents of world-systems
analysis see the world stratification system the same way Karl Marx viewed
class (ownership versus non-ownership of the means of production) and Max Weber viewed
class (which, in addition to ownership, stressed occupational skill level in
the production process). The core nations primarily own and control the major
means of production in the world and perform the higher-level production tasks.
The periphery nations own very little of the world's means of production (even
when they are located in periphery nations) and provide less-skilled labor.
Like a class system with a nation, class positions in the world economy result
in an unequal distribution of rewards or resources. The core nations receive
the greatest share of surplus production, and periphery nations receive the
least. Furthermore, core nations are usually able to purchase raw materials and
other goods from noncore nations at low prices, while demanding higher prices
for their exports to noncore nations. Chirot (1986) lists the five most
important benefits coming to core nations from their domination of periphery
nations:
- Access to a large quantity of raw material
- Cheap labor
- Enormous profits from direct capital investments
- A market for exports
- Skilled professional labor through migration of
these people from the noncore to the core.
According to Wallerstein, the
unique qualities of the modern world-system include its capitalistic nature,
its truly global nature, and that it is a world-economy that has not become
politically unified into a world-empire.
·
The most economically
diversified, wealthy, and powerful (economically and militarily).
·
Have strong central governments,
controlling extensive bureaucracies and powerful militaries.
·
Have more complex and stronger
state institutions that help manage economic affairs internally and externally
·
Have a sufficient tax base so
these state institutions can provide infrastructure for a strong economy
·
Highly industrialized; produce
manufactured goods rather than raw materials for export.
·
Increasingly tend to specialize
in information, finance and service industries
·
More often in the forefront of
new technologies and new industries. Examples today include high-technology
electronic and biotechnology industries. Another example would be assembly-line
auto production in the early 20th century.
·
Have significant means of
influence over noncore nations
·
Relatively independent of outside
control
Throughout the history of the
modern world-system there has been a group of core nations competing with one
another for access to the world's resources, economic dominance, and hegemony over
periphery nations. Occasionally, there has been one core nation with clear
dominance over others. According to Immanuel Wallerstein, a core nation is dominant over
all the others when it has a lead in three forms of economic dominance over a
period of time:
- Productivity dominance
allows a country to produce products of greater quality at a cheaper price
compared to other countries.
- Productivity dominance may lead to trade
dominance. Now, there is a favorable balance of trade for the
dominant nation since more countries are buying the products of the
dominant country than it is buying from them.
- Trade dominance may lead to financial
dominance. Now, more money is coming into the country than going
out. Bankers of the dominant nation tend to receive more control of the
world's financial resources.
Military
dominance is also likely after a nation reaches these three rankings. However,
it has been posited that throughout the modern world-system, no nation has been
able to use its military to gain economic dominance. Each of the past dominant
nations became dominant with fairly small levels of military spending, and
began to lose economic dominance with military expansion later on.
Historically, cores were found in the north-west
Europe (England, France, Holland), although later in other parts of the world
(ex. the United States).
·
Least economically diversified
·
Have relatively weak governments.
·
Have relatively weak institutions
with little tax base to support infrastructure development
·
Tend to depend on one type of
economic activity, often on extracting and exporting raw materials to core
nations.
·
Tend to be least industrialized.
·
Are often targets for investments
from multinational (or transnational) corporations from
core nations that come into the country to exploit cheap unskilled labor for
export back to core nations
·
Has small bourgeois and large
peasant classes.
·
Tend to have a high percentage of
their people that are poor and uneducated.
·
Inequality tends to be very high
because of a small upper class that owns most of the land and has profitable
ties to multinational corporations
·
Tend to be extensively influenced
by core nations and their multinational corporations. Many times they are
forced to follow economic policies that favor core nations and harm the
long-term economic prospects of periphery nations.
Historically, peripheries were
found outside Europe, for example in Latin America.
Semi-periphery nations are those
that are midway between the core and periphery. They tend to be countries
moving towards industrialization and a more diversified economy. Those regions
often have relatively developed and diversified economy, but are not dominant
in international trade. According to some scholars, such as Chirot, they are
not as subject to outside manipulation as peripheral societies; but according
to others (Barfield) they have "periperial-like" relations to the
core. While in the sphere of influence of some cores semi-peripheries also tend
to exert their own control over some peripheries. Further, semi-peripheries
acts as buffers between cores and peripheries, thus "partially deflect the
political pressures which groups primarily located in peripheral areas might
otherwise direct against core-states" and stabilize the world-system.
Semi-peripheries can come into
existence both from developing peripheries, and from declining cores.
Historically, an example of a
semi-periphery would be Spain and Portugal, who fell from their early core
position, but still manage to retain influence in Latin America. Those
countries imported silver and gold from its American colonies, but then had to
use it to pay for manufactured goods from core countries such as England and
France. In the 21st century, nations like China, India, Brazil and South Africa
are usually considered semi-periphery (Arrighi G. et al., 1996a).
External areas are those that
maintain their own economic systems are not integrated with the world economy.
The 13th century world-system
Before the 16th century, Europe was
dominated by feudal
economies. European economies grew from mid-12th to 14th century, but from 14th
to mid 15th century, they suffered from a major crisis. Wallerstein explains
this crisis as caused by:
- stagnation or even decline of agricultural
production, increasing the burden of peasants,
- decreased agricultural productivity caused by
changing climatological conditions (Little
Ice Age),
- an increase in epidemics (Black
Death),
- Optimum level of the feudal economy has been
reached in its economic
cycle; the economy moved beyond
it and entered a depression
period.
As a response to the failure of
the feudal system, Europe embraced the capitalist system. Europeans were
motivated to develop technology to explore and trade around the world, using
their superior military to take control of the trade routes. Europeans
exploited their initial small advantages, which led to an accelerating process
of accumulation of wealth and power in Europe.
Wallerstein notes that never
before had an economic system encompassed that much of the world, with trade
links crossing so many political boundaries. In the past, geographically large
economic systems existed, but were mostly limited to spheres of domination of
large empires (such as the Roman Empire);
development of the capitalism enabled the world economy to extend beyond
individual states. International division of labor was
crucial in deciding what relationships exists between different regions, their
labor conditions and political systems. For classification and comparison
purposes, Wallerstein introduced the categories of core, semi-periphery,
periphery, and external countries. Cores monopolized the capital-intensive
production, and the rest of the world could only provide labor and raw
resources. The resulting inequality reinforced existing unequal development ( Arrighi
G. et al., 1996b).
According to Wallerstein, there
have only been three periods in which a core nation has dominated in the modern
world-system, with each lasting less than one hundred years. In the initial
centuries of the rise of Europe, Northwest Europe constituted the core,
Mediterranean Europe the semiperiphery, and Eastern Europe and the Western
hemisphere (and parts of Asia) the periphery. Around 1450, Spain and Portugal
took the early lead when conditions became right for a capitalist
world-economy. They lead the way in establishing overseas colonies. However,
Portugal and Spain lost their lead primarily due to becoming overextended with empire
building. It became too expensive to dominate and protect many colonial
territories around the world (Arrighi G. et
al., 1996a)
The appropriate strategy to be applied by
developing nation to bring about sustainable development is dependency theory.
The dependency theory tries to aerate developing nations that they are not
developing because they are attached with developed nation which are exploiting
them and obscuring them from development. Therefore, developing nation should
detach from developed nation and stand alone for their development. Let
developing nations share their science and skills and utilise the available
resources for rapid development.
The above explained theories thus world system theory, modernisation
theory and dependency theory are the main theory of advert to all bridges. The
main way to evacuate from poverty circle is to apply independency theory.
5.0 REFERENCES
Amin S.
(1992), 'Empire of Chaos' New York: Monthly Review Press.
Arrighi G.
(1989), 'The Developmentalist Illusion: A Reconceptualization of the
Semiperiphery' paper, presented at the Thirteenth Annual Political Economy of
the World System Conference, University of Illinois at Urbana - Champaign,
April 28–30.
Arrighi G.
(1994), ‘The Long 20th Century. Money, Power, and the Origins of Our Times’
London, New York: Verso.
Arrighi
G. and Silver, B. J. (1984), 'Labor Movements and Capital Migration: The United
States and Western Europe in World - Historical Perspective' in 'Labor in the
Capitalist World - Economy' (Bergquist Ch. (Ed.)), pp. 183 – 216, Beverly
Hills: Sage.
Arrighi
G. et al. (1991), 'The Rise of East Asia. One Miracle or Many?' State
University of New York at Binghamton: Fernand Braudel Centre.
Arrighi
G. et al. (1996a), ‘Modelling Zones of the World-Economy: A Polynomial
Regression Analysis (1964-1994)’ State University of New York at Binghamton:
Fernand Braudel Center.
Arrighi
G. et al. (1996b), ‘The Rise of East Asia in World Historical Perspective’
State University of New York at Binghamton: Fernand Braudel Center.
Arrighi
G. et al. (1996c), ‘Beyond Western Hegemonies’ State University of New York at
Binghamton: Fernand Braudel Center.
Bornschier
V. (Ed.) (1994), ‘Conflicts and new departures in world society’ New Brunswick,
N.J. : Transaction Publishers.
Bornschier
V. (1976), 'Wachstum, Konzentration und Multinationalisierung von
Industrieunternehmen' Frauenfeld and Stuttgart: Huber.
Bornschier
V. (1988), 'Westliche Gesellschaft im Wandel' Frankfurt a.M./ New York: Campus.
Bornschier
V. (1992), 'The Rise of the European Community. Grasping Towards Hegemony or
Therapy against National Decline in the World Political Economy?'. Vienna:
paper, presented at the First European Conference of Sociology, August 26–29.
Bornschier
V. (1996), ‘Western society in transition’ New Brunswick, N.J. : Transaction
Publishers.
Bornschier
V. and Chase - Dunn Ch. K (1985), 'Transnational Corporations and
Underdevelopment' N.Y., N.Y.: Praeger.
Chase -
Dunn Ch. K. (1975), 'The Effects of International Economic Dependence on Development
and Inequality: a Cross - national Study' American Sociological Review, 40: 720
- 738.
Chase -
Dunn Ch. K. (1983), 'The Kernel of the Capitalist World Economy: Three
Approaches' in 'Contending Approaches to World System Analysis' (Thompson W.R. (Ed.)),
pp. 55 – 78, Beverly Hills: Sage.
Chase -
Dunn Ch. K. (1984), 'The World - System Since 1950: What Has Really Changed?'
in 'Labor in the Capitalist World - Economy' (Bergquist Ch. (Ed.)), pp. 75 –
104, Beverly Hills: Sage.
Chase -
Dunn Ch. K. (1991), 'Global Formation: Structures of the World Economy' London,
Oxford and New York: Basil Blackwell.
Frank A.
G. (1978), ‘World accumulation, 1492 - 1789’ London: Macmillan.
Frank A.
G. (1980) ‘Crisis in the world economy’ New York: Holmes & Meier
Publishers.
Frank A.
G. (1981), ‘Crisis in the Third World’ New York: Holmes & Meier Publishers.
Frank A.
G. (1983), 'World System in Crisis' in 'Contending Approaches to World System
Analysis' (Thompson W.R. (Ed.)), pp. 27 – 42, Beverly Hills: Sage.
Frank A.
G. (1990), 'Revolution in Eastern Europe: lessons for democratic social
movements (and socialists?),' Third World Quarterly, 12, 2, April: 36 - 52.
Frank A.
G. (1992), 'Economic ironies in Europe: a world economic interpretation of East
- West European politics' International Social Science Journal, 131, February:
41 - 56.
Raffer K.
(1989), 'Sovereign Debts, Unilateral 'Adjustment', and Multilateral Control:
The New Way to Serfdom' (Singer H.W. et al. (Eds.)), New Delhi: Ashish Publishing
House (quoted here from the author's typescript).
Raffer K.
(1992), ‘The Least developed and the oil - rich Arab countries: dependence,
interdependence, or patronage?’ New York, N.Y.: St. Martin's Press.
Raffer K.
(1993), ‘Trade, transfers, and development: problems and prospects for the
twenty - first century’ Aldershot, Hants, England; Brookfield, Vt., USA: E.
Elgar Pub. Co.
Raffer K.
and Singer H.W. (1996), ‘The Foreign Aid Business. Economic Assistance and
Development Cooperation’ Cheltenham and Borookfield: Edward Alger.
Sunkel O.
(1966), 'The Structural Background of Development Problems in Latin America'
Weltwirtschaftliches Archiv, 97, 1: pp. 22 ff.
Sunkel O.
(1972/3), 'Transnationale kapitalistische Integration und nationale Disintegration:
der Fall Lateinamerika' in 'Imperialismus und strukturelle Gewalt. Analysen
ueber abhaengige Reproduktion' (Senghaas D. (Ed.)), pp. 258 – 315, Frankfurt
a.M.: suhrkamp. English version: ‘Transnational capitalism and national
disintegration in Latin America’ Social and Economic Studies, 22, 1, March: 132
- 76.
Sunkel O.
(1980), ‘Transnacionalizacion y dependencia‘ Madrid: Ediciones Cultura
Hispanica del Instituto de Cooperacion Iberoamericana.
Sunkel O.
(1984), ‘Capitalismo transnacional y desintegracion nacional en America Latina’
Buenos Aires, Rep. Argentina : Ediciones Nueva Vision.
Tausch A.
and Christian Ghymers (2006), 'From the "Washington" towards a
"Vienna Consensus"? A quantitative analysis on globalization,
development and global governance'. Hauppauge, New York: Nova Science
Social Plugin