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Town and Country Planning
Moratuwa University

Introduction to Political Economy
Semester 3 Level 200

Handout 2: Theories of underdevelopment
Background to -Marxist theories of underdevelopment

1) Countries are not independent; economically related through trade
2) Colonialism introduced capitalist system;
3) Therefore, all the less developed countries are integrated into the world capitalist system.
4) Developed world is responsible for the underdevelopment of third world
5) It is the integration with the world capitalist economy that makes these countries poor.
6) Marxist theory can help us to understand this process of underdevelopment Here, three theories are introduced under theories of underdevelopment.

Dependency theory (Gunder Frank) 1966
The most interesting aspect of this theory is that it is a view from the periphery.
Major argument of dependency theory
Underdevelopment is a historical process; not a condition intrinsic to LDCs
The dominant and the dependent countries form into a world capitalist system. Underdevelopment is caused by the functioning of this world capitalist system Development somewhere requires underdevelopment somewhere else
(deve. and under development is two sides of the same coin
“Development of underdevelopment” thesis.
Condition of LDCs is not an issue of lacking internal dynamics (inertia, climate, misfortune etc,) but it is a reflection of the way they are incorporated into the world capitalist system

Prepared by Dr. Nalani Hennayake, Department of Geography, University of Peradeniya October, 2010

Town and Country Planning
Moratuwa University

Introduction to Political Economy
Semester 3 Level 200

This incorporation formed: a metropolis (core) -Satellite (periphery) relationship This relationship occurs at different scales
This relationship is one of favoring the higher level of the chain.
The reason why the metropolitan countries want the peripheral countries to change is to serve their interests to obtain primary products and market for their luxury goods
Argument primarily based on the unequal exchange/trade between the two began as a result of colonialism; plunder of peripheral countries
Brazilian case: Due to expansion of the capitalist economy starting from the 16th century; incorporated vast hinterlands and their cores into the global economy making them into export nodes.
Criticisms
Economistic explanation: everything is an outcome of economic processes
Socialist countries can develop only by delinking with the capitalist system, but capitalist system is fast becoming global
National autarky is seen as a solution.

World System theory: Immanuel Wallerstein (1974, 1980)
Background:
East Asian countries were growing they could no longer be described as dependent Oncoming crisis of the socialist countries; changes in China, eastern
Europe etc.
Major argument of world system theory: There is a world system which has not only a core and a periphery, but also a semi-periphery.
Agreed to the ideas of unequal trade, exploitation of the periphery by the core, existence of a world market
Capitalist system from 16th c, since colonialism.

Prepared by Dr. Nalani Hennayake, Department of Geography, University of Peradeniya October, 2010

Town and Country Planning
Moratuwa University

Introduction to Political Economy
Semester 3 Level 200

Needs to understand how the world system evolve in order to understand how the core-periphery emerged.
External-internal factors argument that emerged with modernization theory and dependency was solved here; it functions as a system no argument of external factors
No two capitalisms such as core capitalism and peripheral capitalism but one capitalist world system
Development and underdevelopment depends on the incorporation of the countries into the capitalist world system
Underdevelopment due to unequal trade regimes
World system analysis required to understand any social change countries develop or underdevelop in relation to this system. they have a particular trajectory within the world economic system
In order to understand world system theory, one also needs to understand how the world system came into being (evolution of the world economy) and the characteristic features of the capitalist world economy

1) Evolution of the world economy (1979)


Evolution from mini systems to world systems



mini systems: o Local societies; with a simple division of labor; within a single cultural system (i.e. hunter-gatherer or primitive agricultural systems); reciprocal-lineage mode



World-empires: o Early in Europe there were world empires ( one common political system); redistributive-tributary mode



World systems or world economies: Spatially extensive economic system; with a single division of labor; with multiple cultural systems; where there is no single political integration, but only a world economy; capitalist mode

For Wallerstein, Modern world-system is that which started in Europe around 1450 and expanded to the whole world by about 1900.

Prepared by Dr. Nalani Hennayake, Department of Geography, University of Peradeniya October, 2010

Town and Country Planning
Moratuwa University

Introduction to Political Economy
Semester 3 Level 200

3) Features of the Capitalist world economy (1984)


One World market: this is the logic thru which the economic decisions in the system are made



Multiple state system: no one state is able to dominate totally; political competition which gives economic decision makers space for maneuvering; this kind of competition was not available in the world empires 

Three tier-spatial structure of the system: (Immanuel Wallerstein
(1984) looked at this spatial disequilibrium) o Market system is organized as a hierarchy of states


a core



a semi-periphery



a periphery

o This hierarchy of states is a result of long term changes/evolution of the world economy and the dynamics of the state system o composition of the hierarchy is determined by the long waves of the world economy o Core, semi-periphery and a periphery, they are dominant processes operating at various levels of the hierarchy o these spatial categories are not geographically static o Core processes: relatively high wages; advanced technology; diversified economy; o periphery: low wages; rudimentary technology; simple production mix; o Semi-periphery: a mixture of both exists

Theory of Articulation of modes of production (Pierre-Philippe Rey)
Rey,s general concern was that the world system and dependency theories do not pay attention to the internal dynamics of the LDCs. Especially they do not emphasize the internal modes of production. He argues that capitalism promotes development, but it

Prepared by Dr. Nalani Hennayake, Department of Geography, University of Peradeniya October, 2010

Town and Country Planning
Moratuwa University

Introduction to Political Economy
Semester 3 Level 200

depends on how it articulates itself with the other existing modes of production.
Sometimes the transitional period may be two long
Number of MoP co-exists; Capitalist mode exists alongside with the noncapitalist and precapitalist modes; they are dependent upon each other.
Capitalist system replaces the non-capitalist wherever profits are to be accrued, No profits to accrue, they the non-capitalist is left alone
Underdevelopment is a stalemate in the process of articulation
South African case: workers lived in the traditional homelands; lands were not so productive so went as labor for the industries; This shows how capitalism articulates with other MoPs

Practice question:
1) In your opinion, what is the best theory that explains the Sri Lankan situation?

Prepared by Dr. Nalani Hennayake, Department of Geography, University of Peradeniya October, 2010

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