FPE - Structuralism and Dependency

Lecture 6

What was the economic impact of European colonization?

• Colonization created economies that were relatively undeveloped.

• Colonies were concerned with the extration of raw resources → created economic problems.

• Economies were integrated into capitalism in a subordiinate fashion.

What is economic decolonization?

• When newly independent countries sought to develop their countries →they wanted to escape their status as producers of primary products.

• Economies that are reliant on primary products have number of problems.

• Sought to industrialize and retain more value in the international division of labour.

Explain the dependency theory.

This theory consideres that the world is divided into core and peripherry economies. The Core countries are the Western States, while the periphery are the Global South countries.

Core economies use primary resources from the periphery for their industrialization → creates dependency.

How is the dependency theory opposit from the neoclassical theory?

Becuase the dependency theory is about the analysis of power.

How does the neoclassical theory assumes that countries develop?

• Participation in trade is a means to development.

• Based on Ricardo’s comparative advantage and mutual benefit.

• Reliance on institutions and good governance.

• Role of policy

What is the modernization theory?

Assumption that economic growth leads to democracy.

How did many Western countries developed?

Not only through trade, but they also used protectionism in order to industrialize → ensured that they could import raw materials but limited industrialized commodities. They do not encourage this for other countries.

Explain the term “delinking” by Samir Amin.

Countries could not develop while in a relationship with the core.

What is import substitution industrialization?

in order to foster industrialization, post-colonial countries restricted imports. They inflated the exchange rate in order to buy capital goods and inputs, and investing in industrial production.

How can the dependency theory be applied today?

It could take into account the organization of production → explain how tech transfer wand the level of value added in commodity chains wook place.