2.1.2 The Dependency Theory and Foreign Aid
The debates among the liberal reformers, the Marxists, and the
world systems theorists have been vigorous and intellectually challenging over
the years. There are still points of serious disagreements among the various
planes of dependency theorists and it is a mistake to think that there is only
one unified theory of dependency. Nonetheless, there are some core propositions
which seem to underlie the analyses of most dependency theorists. Dependency
can be defined as an explanation of the economic development of a state in
terms of the external influences -- political, economic, and cultural-- on
national development policies (Osvaldo Sunkel: 1969: 23). Theotonio Dos Santos
(1971:226) emphasizes the historical dimension of the dependency relationships
in his definition:
[Dependency is]...an historical condition which shapes a
certain structure of the world economy such that it favours some countries to
the detriment of others and limits the development possibilities of the
subordinate economics...a situation in which the economy of a certain group of
countries is conditioned by the development and expansion of another economy,
to which their own is subjected.
There are three common features to these definitions which
most dependency theorists share. First, dependency characterizes the
international system as comprised of two sets of states, variously described as
dominant/dependent, center/periphery or metropolitan/satellite. The dominant
states are the advanced industrial nations in the Organization of Economic
Cooperation and Development (OECD). The dependent states are those states of
Latin America, Asia, and Africa which have low per capita GNPs and
which rely heavily on the export of a single commodity for foreign exchange
earnings. Susanne Bodenheimer (1971). Second, both definitions have in common
the assumption that external forces are of singular importance to the economic
activities within the dependent states. These external forces include
multinational corporations, international commodity markets, foreign
assistance, communications, and any other means by which the advanced
industrialized countries can represent their economic interests abroad.
Third, the definitions of dependency all indicate that the
relations between dominant and dependent states are dynamic because the
interactions between the two sets of states tend to not only reinforce but also
intensify the unequal patterns. Moreover, dependency is a very deep-seated
historical process, rooted in the internationalization of capitalism. In short,
dependency theory attempts to explain the present underdeveloped state of many
nations in the world by
examining the patterns of interactions among nations and by
arguing that inequality among nations is an intrinsic part of those
interactions (ibid). Most dependency theorists regard international capitalism
as the motive force behind dependency relationships. Andre Gunder Frank (1972:
3), one of the earliest dependency theorists, is quite clear on this point:
....historical research demonstrates that contemporary
underdevelopment is in large part the historical product of past and continuing
economic and other relations between the satellite underdeveloped and the now
developed metropolitan countries. Furthermore, these relations are an essential
part of the capitalist system on a world scale as a whole.
According to this view, the capitalist system has enforced a
rigid international division of labour which is responsible for the
underdevelopment of many areas of the world. The dependent states supply cheap
minerals, agricultural commodities, and cheap labour, and also serve as the
repositories of surplus capital, obsolescent technologies, and manufactured
goods. These functions orient the economies of the dependent states toward the
outside: money, goods, and services do flow into dependent states, but the
allocation of these resources is determined by the economic interests of the
dominant states, and not by the economic interests of the dependent state. But
before going into the debate on whether aid does encourage dependency and
inefficiency, we need to address a particular misconception: that aid to
developing countries, known as official development assistance (ODA), is an act
of simple generosity towards poor countries in dire need of capital to invest
in education, health, infrastructure, and so forth, and that it comes with no
strings attached. Development assistance is neither value-free nor benevolent.
It has served and continues to serve the economic, political and strategic
interests of
donor countries. This was particularly so during the Cold War
period. It is even more evident today. (ActionAid, 2005)
So aid is an instrument, not a gift. For many Western
countries and institutions, it plays a key role in their overall strategy to
maintain and even expand their influence in Africa. This is particularly true
for former colonial powers such as France and Britain, which have used aid to
maintain their influence in former colonies, in economic, financial, military
and strategic areas. This type of aid does create dependency and it is intended
to, since its primary objective is to shore up regimes that are
friendly? to Western countries, regardless of the nature of those
regimes. This explains, among other things, why a dictatorial and inept regime
like Mobutu in the former Zaire (DRC) was kept afloat despite the looting of
his country?s resources and the rampant corruption that characterized his
regime. Billions of dollars looted by Mobutu are still stashed in Western banks
while the Congolese people wallow in poverty (ibid).
Moreover, since the start of the debt crisis, aid dependency
has been aggravated by conditions imposed by the IMF and World Bank. Since the
1980s, aid from Western countries has been conditional on recipient countries
implementing policies dictated by these two institutions. One may argue that, a
typical example is the catastrophic ESAP of Zimbabwe in the 1990s. Even aid
from former colonial powers to their former colonies is now conditional on
signing an agreement with the IMF, yet it has become clear that these policies
have done more harm than good. (Government of Zimbabwe 1991)
The dependency on foreign aid has political as well as
economic costs. It is obvious that a country that depends on foreign assistance
for up to 40 per cent of its budget cannot control its own policies. Instead,
as the IMF and World Bank?s structural adjustment programmes show, donors
dictate economic and financial policies, based on their own world view and
interests (HDR-UNDP, 2007). The structural adjustment programmes, imposed by
the IMF and World Bank, are a reflection of that reality. As already indicated
this has worsened the economic crisis and deepened external dependency, while
the conditions attached to such multilateral aid are the principal cause of the
abject poverty affecting more than half of the African population. Against this
background, one may argue that from a dependency theory point of view, the
issue of foreign aid is a form of colonialism (neo-colonialism),hence Third
world nations will remain entirely dependent on first world nations.
On the whole the Modernization and Dependency theories are
macro-theories that evaluate society from a holistic perspective. As such there
is no wonder why all of them fail the test of local contextualization; hence
the need to look at some micro - theories that can explain the politics of aid
at a micro or local level. Two theories have been selected for this balancing
purpose: interactionnism and feminism.
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