Australia in the Age of International Development, 1945–1975 by Nicholas Ferns

Author:Nicholas Ferns
Language: eng
Format: epub
ISBN: 9783030502287
Publisher: Springer International Publishing

Dependency Theory: A Challenge to the Orthodoxy

Raul Prebisch, who served as head of the UN Economic Commission for Latin America (ECLA) and was the first Secretary-General of UNCTAD, presented an early challenge to the orthodox view that developing countries’ terms of trade in agriculture would improve relative to that of manufacturing. Writing in 1949, he theorised that the reverse was the case, devising what would become known as the Prebisch-Singer Thesis.16 Throughout the 1950s and early 1960s, Prebisch continued to observe that in spite of continued economic and technical assistance, developing countries (referred to by Prebisch as the ‘periphery’) relied on primary exports and were falling further behind their developed counterparts (the ‘centre’).17 This notion ran counter to orthodox developmental theory, which argued that economic growth in ‘underdeveloped’ economies would be enhanced by assistance from the richer parts of the world. By the mid-1960s, Prebisch’s analysis was adopted and built upon by Andre Gunder Frank, and became known as dependency theory.18 Nevertheless, as Nick Cullather identifies, while the ideas of dependency challenged those of the modernisation paradigm, “they agree on fundamental assumptions encoded on the terms development and modernization.”19 While modernisation theorists held an intrinsically optimistic view of development, scholars like Prebisch and Frank emphasised the inequities within the international capitalist system.20 Development was still the goal for dependency theorists; they just sought to revise the structural terms by which the process would take place. Given their focus on resolving deep inequities in the international economic system, these ideas received an understandably positive response throughout the developing world.

Dependency theory emerged in the mid-1960s as the modernisation paradigm was at the peak of its influence over developmental thinking. While Prebisch’s observations of the declining position of the developing countries appealed to the leaders of newly independent countries, much of the international development system continued to be informed by modernisation. Nevertheless, there was growing awareness within the developed world of the lack of progress being achieved by development policy. The dominant complaint from the Global North revolved around the concern that despite almost two decades of economic and technical assistance, the need for continued aid appeared more necessary than ever. In the United States, this concern was best represented by the 1963 Clay Committee on Foreign Aid, which had the task of investigating the efficiency of American aid spending. One of the key complaints noted by the Committee was the feeling amongst many American politicians that the United States was bearing too much of the burden of economic and technical assistance throughout the world.21 According to observers of the Clay Committee, “congressional and public support for foreign aid had been sapped by the all-too-frequent readiness of the American government to give aid that could not be justified by economic criteria.”22 Similar questions regarding the use of aid funding drove the 1964–1965 Australian Inter-Departmental External Aid Review, which will be examined in the next chapter. These concerns over the effectiveness of foreign aid challenged two decades of assertions by development theorists who had

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