This post is barely worked up from an email I wrote in response to a student in development studies. She’d been working on environmental this and that and the Sustainable Development Goals (about which I’d class myself a card-carrying member of the economists club as being highly sceptical). Anyway, having sent her to my missive on environmental policy as symbolism, She asked me about Dependency Theory. This is, with a bit of light editing, what I wrote back. As you can see, I’m going on impressions I have, not any deep learning about the subject. So this is strictly FWIW – which may be very little.
I don’t know much about dependency theory. I’d be wary of the way in which it is so easily politicised. I don’t mean by that to suggest an ideological bias one way or the other but rather something else. I’ve recently come to think that one of the most important ways we hold ourselves back is impatience. Particularly the impatience with which we proceed from intellectual idea to some policy proposal. (This was the point of all those pictures of Leonardo Da Vinci doing design and engineering work on flying machines and the impossibility of building an efficient modern jet plane without literally millions of hours of work – design work, engineering work prototyping. Much of this work won’t work out, some of it will and slowly capability – social, technical, organisational, economic, policy – is built – see this presentation.
So of the people who cooked up dependency theory – at least reading about it on Wikipedia, I’ve not done so before – they’re not all people with ideological barrows to push – a lot of them are just trying to understand development to promote it.
But it’s then become a way for the left to blame the developed countries for their plight and a means to justify impatience. The pitch is this – “just follow our (often Marxist or strongly leftist) agenda and things will all sort themselves out”. But the main problem of the developing countries is their inability to patiently build all the technical, social and market infrastructure for their economy to become more productive.
A good rule of thumb here is the idea that if a nation imposes trade restrictions, it will bear around 80 percent of the total global cost of those restrictions – with countries trading with it bearing the other 20% (this will generally vary somewhat with the size of the country and at least intuitively you’d expect the larger the country, the more costs it could impose on other countries, but that’s just my intuition – it could be wrong).
So there’s some truth in dependency theory I think but
- It’s only a very partial explanation of under-development and
- More importantly if one wants to use it as a frame, you can use it to pinpoint very specific ways in which it might work – so that the developing country can focus its policy response to those things that are blocking its development. That then gives you a way to frame what is a more promising line of analysis in people like Rodrik, Hausmann and so on (Being South American, you’ll be pleased that Hausmann is South American – though in his case Venezuelan).
Anyone have any other (preferably better informed) thoughts?