Dependency Theory
Dependency theory is a school of thought in international relations which argues that the so-called Third World (or the “Global South”) is systematically exploited and kept in a state of economic dependence by the industrialized nations of the “Global North.” The theory was developed in the early 1960s by a group of Latin American economists seeking to explain persistent poverty and inequality in the Global South.
According to dependency theory, the Global South is exploited for its cheap natural resources without the chance to develop autonomously. This exploitation is the result of a global system of economic relations that favors developed nations, while keeping less developed nations in a subordinate position. More specifically, the theory claims that the Global South is forced into a subordinate role in the global economy because of structural dependencies on industrialized nations.
These mechanisms of control include:
- manipulation of commodity prices,
- distortions of the global market,
- dominance of foreign multinational corporations,
- external debt, and
- direct political interference.
Together, they prevent autonomous development and reinforce economic, social, and political inequalities.
Dependency theory was highly influential on the economic policies of developing nations in the 1960s and 1970s, inspiring calls for greater political and economic independence. However, it has also been criticized for its deterministic outlook and for failing to adequately address the complexities of contemporary international relations.
Connection to Sen
One possible link between Sen’s work and dependency theory lies in the theme of inequality and limited access to resources. Dependency theory emphasizes the asymmetric relationship between the Global South and the Global North, showing how economic dependency and political subordination limit opportunities for development and improved living conditions.
Sen, in contrast, focuses on individual capabilities as the foundation of human well-being, stressing the importance of providing all people with the opportunities and resources necessary to develop their abilities and to lead autonomous, meaningful lives. In this sense, Sen’s approach connects to dependency theory by highlighting how structural economic dependency in the Global South restricts local populations’ capacity to realize their potential.
Both perspectives underline the importance of greater participation of local populations in decision-making processes, in order to reduce political subordination and promote social and economic justice. Taken together, dependency theory and Sen’s capabilities approach offer complementary perspectives for understanding global inequality and development dynamics, as well as for designing policies to address them.
Development as Freedom (Sen)
In the context of Sen’s Development as Freedom, welfare theory (Sozialwesen Theorie) is represented by the idea of development as the expansion of human freedoms and opportunities.
- Evaluation Criterion (Bewertungsmaßstab): Success in development must be assessed not only in terms of economic growth but also in terms of improvements in human well-being.
- Information Basis (Informationsbasis): Relevant and reliable information is required to evaluate development outcomes.
- Advantages of the Information Basis (Vorzüge): More accurate assessments of well-being and opportunities; better identification of effective policies and strategies.
- Disadvantages (Nachteile): Collected information may be incomplete or fail to capture all dimensions of human well-being.