Dependency Theory in Its Original Form

Philosophical Framework

Dependency theory in its original form was rooted in the Marxist-structuralist tradition, for which the key analytical tool is the historical-materialist analysis of world capital as an integrated system. The main focus shifts from a national modernization lens to center-periphery relations, where structural economic ties and historical processes of production and exchange explain persistent disparities in development levels. (In brief: not individual cultural factors, but global redistributive mechanisms.)

Methodologically, this was a major synthesizing attempt—a combination of large-scale historical reconstruction, macroeconomic attention to trade and capital flows, and social analyses of class forces within peripheral societies. This approach bridges to empirics through comparative-historical studies, sectoral case studies, and analyses of transnational corporations, not limited to formal regressions or universal growth models.

Introduction

In the 1960s–1970s, dependency theorists challenged the optimistic modernization paradigm, arguing that external ties to the industrialized world generate and reproduce the structure of "underdevelopment" in the periphery. Andre Gunder Frank formulated this as the "development of underdevelopment": peripheral economies integrate into world capital such that their capital accumulation is directed toward reproducing inequality rather than autonomous growth [Frank, 1978].

Key hypotheses of the early version included: (1) systemic causality—external sectoral and trade links determine internal trajectories; (2) the mechanism of unequal exchange as a source of constant extraction of "real value" from the periphery to the center; (3) specific forms of capital accumulation in the periphery, distinct from metropoles but serving the interests of the world market. These propositions explained long-term stagnation and social polarization in several Latin American and African countries; simultaneously, they sparked debates about determinism and the role of national actors.

Contemporary revisions do not ignore the strength of the original intuition but reclassify the tradition as a research program, highlighting its core and variability of approaches [Kvangraven, 2020]. The central empirical question, which remains open and will guide further discussion in the main part of the course, is: to what extent do Frank’s original schemes describe differences between industrialization trajectories (e.g., South Korea vs. Latin American countries), and which mechanisms (international, domestic, agentic) best explain deviations from the "pure" dependency model?

Literature Review

What Constitutes the Core of Dependency Theory as a Research Program?

How is it possible to simultaneously speak of "development" and its "development as underdevelopment"—a paradox that gave rise to the term "development of underdevelopment"? This thesis by Andre Gunder Frank shaped the central problem: world capital accumulation differentiates regions within a single world system, creating developing and "dependent" peripheries deprived of autonomous development trajectories [Frank, 1978]. The phrase "development of underdevelopment" became not just a cliché but a methodological pointer: one must explain not a local failure but the structural production of underdevelopment within world relations.

Defining dependency theory as a research program clarifies its logic and boundaries: Kvangraven identifies four foundational points—global-historical approach; theorization of polarizing tendencies of world capitalism; focus on production structures; and attention to specific constraints of peripheral economies [Kvangraven, 2020]. This configuration emphasizes not a universal “growth formula” but a set of questions and methods that direct empirical and historical work.

The global-historical approach means the periphery is not viewed as a pre-industrial or abstractly “backward” space but as a product of a long process of inclusion in the capitalist system. Frank explicitly writes that "world capital accumulation has led to the differentiation of these regions within the single world-embracing economic system"—this is not a metaphor but a methodological requirement to study the long trajectory of transformations, value flows, and institutional ties [Frank, 1978].

The second pillar—polarizing tendencies of capital—focuses on the fact that the world economy tends not toward equalization but toward centripetal and centrifugal movements that strengthen the center’s advantages and exacerbate peripheral dependencies. Frank and his followers’ approach relies on ideas of unequal exchange and permanent surplus value outflow, which Mendes and others later termed "dependent accumulation" as a systemic phenomenon [Frank, 1978].

The third and fourth points—production structures and specific peripheral constraints—require studying not only external trade relations but also the internal structure of economies: sectoral composition, class coalitions, property institutions, and political regimes. Cardoso criticized attempts to detach such analyses from class and historical specificity: instead of making a dialectical analysis of historical processes, conceiving of them as the result of struggles between classes and groups... history is formalized—a warning about the risk of abstract schematism [Cardoso, 1977]. This critique reveals tension within the program: how to preserve historical-class density while formalizing explanations.

The internal diversity of dependency theory is both its strength and the subject of disputes. Cristobal Kay emphasizes that within the "dependency school" there are different strands: Frank leans toward Marxist explanations, whereas structural approaches like ECLAC and others emphasize institutional and modal factors [Kay, 2011]. Such diversity allows the research program to explain both major global shifts and local industrialization variants but complicates claims to a unified causality model.

The problem of mechanisms remains central: how exactly does value transfer from the periphery to the center occur? Arghiri Emmanuel and his interpreters, through the concept of "unequal exchange," proposed a trade channel—labor time in the periphery is exchanged for center goods with higher labor content, which consolidates the distribution of benefits in favor of the center [Levine, 2002]. This version does not exclude direct investments and profit repatriation but shifts emphasis to the structural character of trade relations and the relative price of labor.

Criticism pointing to circular logic in explanations is clearly voiced by Namkoong: "The main weakness of dependency theory lies in explaining the origin of underdevelopment. In other words, the relation between underdevelopment and dependency is explained in a circular manner" [Namkoong, 1999]. This argument forces a distinction between two levels: empirical reproduction of underdevelopment and the historical origin of its first emergence. The research program answers the first more strongly than the second and thus requires detailed reconstruction of initial conditions of inclusion in the world system.

Empirical tests and syntheses have given dependency theory more boundaries and opportunities for refinement. The collection in honor of Frank and works by Denmark and Chew demonstrate that diverse cases—from Latin America to Africa and Asia—require methodological flexibility and multidisciplinarity in measuring unequal exchange, capital migration, and labor relations transformation [Chew et al., 1998]. Zimmerman, studying hierarchical regional systems, showed that dependency can have political and military-strategic aspects intertwined with economic structure [Zimmerman, 1978].

Returning to the present, Kvangraven argues that the combination of four main principles makes the dependency program unique and useful for analyzing today’s problems: global history plus focus on production structures explain why some peripheries industrialized (e.g., South Korea) and others did not, especially amid fragmentation of global value chains [Kvangraven, 2020]. This argument shifts the debate from questions of the “correct model” to questions of which mechanisms and institutions in specific cases enable or block inclusion in value creation processes.

Finally, there are political-theoretical variations: contemporary studies of the Marxist strand of dependency (MDT) revise classical postulates and formulate new political strategies and explanations of exploitation, illustrated by Nogara in analyzing similarities and contradictions between MDT and Leninist traditions [Nogara, 2024]. Such polemics show that the core of the research program is not monolithic—it consists of sets of questions, methods, and categorizations that compete and complement each other.

The practical and open question remains: by what specific mechanisms does dependency theory explain the origin and reproduction of underdevelopment in each case—trade regimes, production structure, surplus value redistribution, intra-class conflicts, or political institutions? This question leads to a more detailed analysis of mechanisms and reproduction of underdevelopment.

How Is the Origin and Reproduction of Underdevelopment Explained within Dependency Theory?

Building on the previous reconstruction of the core of dependency theory, the next natural question is: through which mechanisms does the inclusion of the periphery in the world system generate and consolidate its underdevelopment? Answers within classical dependency are divided into several interconnected but analytically distinct interpretations; we start with the most radical—the theory of unequal exchange by Andre Gunder Frank. Frank argued that "world capital accumulation has led to the differentiation of these regions within the single world-embracing economic system. Unequal exchange between regions... has led to the capitalist development of some and underdevelopment of others" [Frank, 1978]. This formulation translates the problem into a system of structural transfers—a net flow of value from the periphery to the center, which hinders capital accumulation and institutional autonomy in peripheral societies.

The mechanics of unequal exchange in Frank’s works are elaborated through the notion of a historical process: the periphery exports raw materials and low-paid labor in exchange for industrial goods and technologies, which come as permanently partially “foreign” means of production and knowledge. This results not only in income flows but in constant technical and institutional dependence: peripheral firms and states must orient toward external markets and external financial demands, which destroys internal coordination of accumulation. Unlike a purely trade explanation, here the structural character of relations reproducing disproportions in the division of labor and capital is central [Frank, 1978].

An alternative, softer version of dependency originated from researchers who observed cases of industrialization under dependency and tried to explain how development can occur within dependent relations. Fernando Henrique Cardoso and Enzo Faletto wrote that "foreign investment and trade with the developed countries while furthering a dependent relationship can lead to economic development in the developing world, albeit of an uneven and unequal kind" [Cardoso, 1977]. This turn introduces the idea of dependent development: growth is possible but embedded in a logic of subordination—investments create industrial hubs but do not remove structural vulnerability to external shocks and control.

Peter Evans developed the empirical side of this argument through the concept of a "triple alliance" among transnational capital, the national state, and local entrepreneurship, explaining Brazil’s industrialization path. Evans shows that relations among the three kinds of capital continue to be contradictory, a triple alliance has been formed that provides the social structural basis for the pattern of local industrialization that has emerged. This model helps understand why peripheral industrialization often follows a path of "embedding" in the global market through specific coalitions rather than autonomous industrialization: state projects and local elites can use foreign capital for accumulation, but this form of development remains vulnerable and does not eliminate dependency.

Criticism raised by Namkoong draws attention to a logical problem: "the relation between underdevelopment and dependency is explained in a circular manner" [Namkoong, 1999]. Here, not only the paradox of theoretical reflection but also empirical operationalization is important: if "dependency" is understood as both cause and effect, how to distinguish primary causes and reproductive mechanisms? Namkoong points to the need to unpack the chain—capital, trade, institutions, class structures—to avoid tautological explanation where dependency becomes both diagnosis and explanation without independent indicators.

One can use a metaphor from media theory: Sandra Ball-Rokeach considered macro-dependencies as conditions that "determine the structural centrality of the media system—its information resources and their application in the production of knowledge." Similarly, in economics, the world system distributes not only goods and capital but also informational-institutional resources: access to technologies, standards, and financial instruments concentrates in the center, reproducing peripheral marginalization. This analogy helps clarify that "circular" dependency has different levels: material flows and symbolic/institutional channels.

Jeffrey Frankel, in a survey of the resource curse, introduces specific macroeconomic mechanisms linking specialization in raw materials with long-term sluggish development, discussing in detail the problem of "Dutch disease" and institutional responses of central banks. He notes: "Inflation Targeting (IT) has a particular disadvantage for commodity producing countries: it is not robust with respect to changes in the terms of trade" and proposes the rule Peg the Export Price (PEP) as a tool allowing automatic accommodation of terms of trade changes [Frankel, 2010]. These technical mechanisms show how external shocks in commodity prices transform into internal macroeconomic and institutional consequences, increasing vulnerability.

Integrating Frank’s explanations of unequal exchange and Frankel’s explanations of commodity dependence provides a more comprehensive picture: specialization in commodity export items improves current accounts during booms but simultaneously creates structural distortions—currency appreciations, resource outflows from manufacturing, dependence on foreign financial capital—that convert short-term rents into long-term stagnation. Such synergy of mechanisms strengthens the thesis that reproduction of underdevelopment is multichannel: trade, currency policy, investment patterns, and institutional centralization work together [Frank, 1978].

Empirical diversity leads to an important clarification: not all peripheries are the same. In Latin America, paths described by Cardoso and Evans—industrialization through external capital and state interventions—were observed, whereas in East Asia, implementation of import substitution and active industrial policy led to more autonomous accumulation (as indicated by analyses of Wallerstein and followers). Such diversity requires distinguishing between explaining the origin of underdevelopment and explaining its reproduction: the former are historical systemic processes, the latter are contemporary institutional and political-economic practices that can be transformed or entrenched.

The methodological conclusion from comparing these positions is simple: analysis must clearly identify "dependency variables" (capital flows, trade conditions, ownership structure, currency policy) and show their temporal and causal sequence. Namkoong’s critique becomes practical: how to reconstruct the chain to separate primary external impacts from internal political decisions that either mitigate or amplify effects? Here it is useful to apply analytical tools combining macroeconomic analysis (as in Frankel) with institutional and class analysis (as in Cardoso and Evans).

Finally, the theoretical knot: does the explanation of underdevelopment in dependency theory rely exclusively on structural determinism, or does it allow agentic windows of modernization? The answer from classical authors’ experiences is mixed. Frank tends toward a stricter structural diagnosis; Cardoso and Evans demonstrate that agency and national strategies matter, but these strategies are realized within the constraints of the world system. This leads to the key question: to what extent does emphasis on capital flows and class alliances place dependency theory within the Marxist tradition, and to what extent does it make it an independent research program with its unique assumptions and toolkit?

Is Dependency Theory Part of the Marxist Tradition or an Independent Approach?

If the origin and reproduction of underdevelopment in dependency theory are linked to external structural ties between center and periphery, the logical question is: does this link bring dependency theory direct continuity from Marxism, or does it construct a new paradigm distinct from the classical Marxist corpus? This question cannot be reduced to a simple "yes/no": the answer depends on which elements of Marxism are considered defining.

Marxism provides a critical methodology that many early dependency authors perceived as a starting point. Marx himself formulated the basic heuristic stance as: It is not the consciousness of men that determines their being, but, on the contrary, their social being that determines their consciousness, and the ideas of the ruling class are in every epoch the ruling ideas [Marx, 1845]. These propositions provide tools for analyzing production relations, surplus value appropriation, and ideological domination; they are evident in dependent authors’ works who translate local class relations into an international context. Consequently, historical materialism served as a theoretical “patron” of early dependency.

However, it is appropriate to distinguish borrowing categories from identity of traditions. Andre Gunder Frank radicalized the idea: he wrote about the relation "development—underdevelopment" as two sides of one process of world capitalist expansion, where "underdevelopment is created by development." This statement uses Marxist logic but shifts the center of analysis from national classes to the world system of relations; as a result, the emphasis moves from internal class struggle to exchange structures and dependency. Frank is close to Marxism in the diagnosis of exploitation but distances himself in scale and the role of internal social agents.

Carlos Cardoso and Faletto proposed a different turn within the same tradition: their argument is that dependency does not mean automatic subordination to external forces without internal development trajectories. They wrote that structures and processes inside countries are not merely reflections of external hegemony; they have their own dynamics [Cardoso, 1977]. This shift makes dependency theory less predictably Marxist: class analysis remains but is supplemented by institutional, political, and agentic analysis, resulting in a hybrid theory that rejects economic determinism.

Immanuel Wallerstein proposed his version, naming the object of analysis the "capitalist world-economy," thus giving dependency a macrostructural, systemic form [Wallerstein, 1974]. His approach is close to Marxism in understanding capitalism as the driver of historical process but removes emphasis from national revolutionary-class strategy and centers on the functioning of world economic zones and relations. Because of this, some interpret Wallerstein as a transition to an autonomous, non-classical direction.

One must also consider criticism within the Marxist tradition: some authors point to a mismatch between Marxist Leninism and some versions of dependency. In the latest revisionism of dependency theory, notes Nogara, key Leninist concepts are lost, and arguments previously belonging to opponents of classical Marxism return in a new form [Nogara, 2024]. This remark emphasizes that terminological closeness to Marxism does not guarantee theoretical identity: differences in methods, roles of the state, and class strategy are of fundamental importance.

Several authors proposed formal methodological neutrality: Kvangraven emphasizes that diversity within the tradition requires a definition capable of encompassing the strength of a wide range of dependency theories... it is a research program [Kvangraven, 2020]. These authors shift the discussion from the plane of “labeling” to methodology: dependency is not so much an ideological offshoot of Marxism as a set of problematic questions and hypotheses about center-periphery relations. Kay also notes that the origin of the theory is Marxist, but its transformations have made it a multifaceted phenomenon [Kay, 2011].

Economic mechanisms proposed by different dependency representatives further demonstrate multiplicity of connections with Marxism. Prebisch at the level of structural dependency showed that terms of trade in center-periphery trade worsen for the latter, which essentially induces externally conditioned stagnation [Prebisch, 1950]. Arghiri Emmanuel and Samir Amin developed the theme of unequal exchange and systematic inter-perspective redistribution of surplus value [Emmanuel]. These economists use Marxist categories—surplus value, exchange—but apply them to international trade dynamics, adding analytical instruments not always following the classical canon.

The political component divides positions within the dependency school: Frank and Wallerstein assign determining power to world market structures, whereas Cardoso and Faletto introduce agentic elite decisions, state strategies, and local politics into the analysis. This explains why some versions of dependency are closer to revolutionary Marxism, and others to pragmatic institutionalism. The question here is not only methodological but also practical: what development strategies should be proposed to peripheral countries—rupture with the world system or change within it?

The historical dimension also complicates the picture. The diversity of early works showed that dependency in the 1960s–1970s tended toward radical critique of world capitalism, approaching Marxism in spirit (Frank, Amin), but by later forms came a wave of restructuring and political pragmatism (Cardoso and Faletto). Evolution makes the claim of static identity with Marxism doubtful because adaptations change not only empirical emphases but also fundamental ontological positions.

The practical outcome of such analysis is recognition of the hybrid status of dependency theory: it has Marxist roots in critique of capitalism and concepts of exploitation but simultaneously constructs autonomous theoretical tools—systemic, structural-functional, institutional—that distance it from classical Marxist recipes. In this vein, Kay notes Marxist origin but emphasizes diversity of transformations [Kay, 2011], and Kvangraven proposes to perceive dependency as a research program rather than an ideological label [Kvangraven, 2020].

A number of key questions remain open, forming the transition to criticism: how do empirical verifiability and macrohistorical claims of dependency relate; to what extent does internal class analysis retain explanatory power; and how to account for political autonomy of peripheral actors within the world structure? These questions lead directly to consideration of main directions of criticism of dependency theory and ways to overcome them.

What Are the Main Directions of Criticism of Dependency Theory and How Are They Overcome?

The link with the discussion about whether dependency theory belongs to the Marxist tradition or exists autonomously naturally leads to the question of criticism of its methodological and empirical foundations: which reproaches proved most resilient and how did dependency proponents respond?

The first major cluster of reproaches is accusation of tautology and imprecision of conceptual apparatus. Kvangraven explicitly formulates a typology of claims: "The critiques of dependency theory can be roughly categorized as being about tautology and precision, economic reductionism, and the lack of agency associated with an overly strong focus on the ‘external’" (Kvangraven, 2020). This formulation is convenient because it separates the problematics of argument logic from those of empirical testability and political practice.

Next in order is economic reductionism: critics point out that the theory reduces complex historical and political processes to mechanics of external market structures and capital flows. This accusation was especially voiced in the 1970s–1980s when policymakers and economists sought micro- and macro-growth policies capable of explaining Asian economies’ successes. Chilcote emphasizes internal polemics in dependency debates: "the 1981 special issue of Latin American Perspectives (Chilcote, 1981) illustrates the heated and polemical nature of the debates within dependency theory, with each side (structuralist, classical Marxist, neo-Marxist) accusing the other of being ‘outdated’, for using ‘unquestioned formulas’, ‘eclecticism’, for acting as ‘ideological cops’, etc." This indicates not so much an objective error in this criticism as the multivector nature of the theory itself and its factional character.

The third block of reproaches relates to underestimation of agency—the thesis that "external" domination mechanisms leave too little room for class conflicts, state strategies, and local social actors. Recall Ball-Rokeach’s work on power-dependence: she reminds that power is a relation, and one actor’s dependence on another’s resources is determined by the availability of alternative access to those resources (Ball-Rokeach, 1998). Such relational logic showed the way to overcoming the cliché of "powerless" peripheries: dependency does not totally determine actors’ actions; it opens a field of strategies and conflicts over alternative resource entries.

The transition from accusations to defense of the theory is often made by its proponent Cardoso. He noted that criticism often works with a simplified caricature of the theory: "much critique of dependency theory is based on an incomplete, superficial, and at times incorrect understanding of what dependency theory is, which led Cardoso (1977: 15) to argue that the common simplification and misunderstanding of dependency theory had made it ‘a straw man easy to destroy’" (Cardoso, 1977). This defense is important: it requires addressing specific, not imaginary, formulations of opponents.

The practical dimension of the dispute is emphasized by economists who present technical counterexamples from resource economics and trade analytics. Frankel, in a survey of resource curse problems, pays attention to price volatility, hedging instruments, and institutional mechanisms that can reduce exporters’ vulnerability: "The simplest device would be indexed contracts, where the two parties agree ahead of time, ‘if the world price goes up ten per cent, then the gains are split…’" (Frankel, 2010). Economists show that part of the causal chain on which dependency critics rely (e.g., exclusively external prices) can be adjusted by institutional decisions; this forces dependency theorists to refine mechanisms rather than abandon the overall perspective.

A notable defense strategy is differentiation within the theory: proponents separate external and internal factors, introduce origins of class factions, roles of the state, and institutional strategies. This response is heard in polemical issues and collections: in heated 1980s debates, structuralist, classical Marxist, and neo-Marxist versions accused each other of dogmatism, but these disputes stimulated methodological enrichment (Chilcote, 1981). The internal critique became a driver of conceptual and methodological refinement.

Economic and institutional criticism also led to attracting high-resolution empirics: case studies, export time series, analysis of rent distribution conflicts. Humphreys, Sachs, and Stiglitz raise questions about debt shocks and vulnerabilities previously explained only by "dependency structure": "would not have happened if their debts had been indexed to their commodity prices…" (Humphreys et al., 2007, cited in Frankel, 2010). Such details shift the dispute from abstract accusations to specifics of financial instruments and institutional design.

Historical-systemic responses develop the world perspective: researchers inspired by Wallerstein and Arrighi showed that dependency is understood as a position in the world accumulation process, where periphery, semi-periphery, and center interact ambiguously. This expansion addresses some reductionism claims because it returns agency to the macro scene: peripheral states can change "embedding" through political alliances, import substitution, or strategic intervention. Here also voices of Samir Amin and other critics are heard, who proposed viewing dependency as a structural-historical phenomenon without predetermination.

Finally, a pragmatic transformation is observed: dependency theorists have taken into account economists’ technical remarks (e.g., on hedging tools, debt indexing, and price policies), subordinated their models to empirical tests, and complicated notions of the "external" factor by introducing internal variables (classes, state, elites) and multilevel layered analysis. Helm and other economists showed that institutional decisions (agreements, cartels, indexed contracts) affect the vulnerability degree of exporting countries (Helm, 2010; Frankel, 2010). This does not negate the main dependency analysis but shifts the debate to combined theory and policy.

The final diagnostic question arising from the discussion: which critics’ arguments remain unresolved enough to require a fundamental revision of the theory? The answer is simple: issues of logical precision and empirical falsifiability still lie on the surface, but overcoming economic reductionism and restoring agency have already been achieved through methodological and empirical adjustments. The next logical step is to compare on what grounds dependency theory and postcolonial theory explain inequality and how their emphases on structure, discourse, and agency differ.

What Is the Difference Between Dependency Theory and Postcolonial Theory in Explaining Inequality?

Continuing the analysis of criticism of dependency theory and ways to overcome it, it is useful to pose a fundamental question about the level of explanatory analytics each tradition operates on: material-structural or discursive-cultural. Kapoor explicitly notes that "Dependency chooses a structuralist and socioeconomic perspective, seeing imperialism and development as tied to the unfolding of capitalism" whereas "postcolonial theory favours a post-structuralist and cultural perspective, linking imperialism and agency to discourse and the politics of representation" [Kapoor, 2002]. This quote sets axes of difference but does not exhaust the complexity of intersections—precisely at this boundary further reasoning unfolds.

The historical core of dependency theory focused on external economic relations and their ability to fix peripheral economies in subordinate positions. Andre G. Frank, Prebisch, and others formulated the idea that the world system distributes economic functions such that the periphery exports raw materials and the center increases added value; hence, underdevelopment is reproduced [Frank] [Prebisch]. In this logic, inequality has a causal-structural character: it grows out of international specialization and transnational capital, not from local cultural deficits.

The economic side of the argument is confirmed by empirical studies of commodity cycles and the "resource curse." Jeffrey Frankel observes that in several studies "institutions trump everything else"—that is, institutional factors mute the influence of geography and trade—but Frankel himself discusses mechanisms through which commodity dependence leads to corruption, inefficient fiscal behavior, and procyclicality of budgets [Frankel, 2010]. These mechanisms fit well within the dependency explanatory model: external rent transforms into internal institutional weakness and economic instability.

Postcolonial theory, by contrast, shifts emphasis to language, representation, and subject formation in discursive practices of colonial and neocolonial domination. Edward Said and followers show how knowledge about the "colonized" is formed as power/knowledge, enabling political and economic domination [Said]. Sandra Ball-Rokeach emphasizes that under structural uncertainty, large information systems and media shape people’s ability to interpret their situation: individual and social experience of uncertainty is an informational-affective problem created by macrostructure [Ball-Rokeach, 1998]. For postcolonialists, discourse is not a secondary effect but an active component of reproducing inequality.

Methodologically, the difference is clear: dependency theory tends toward macroanalysis, historical-structural explanations, and in some works quantitative tests (analysis of commodity chains, terms of trade, capital flows). Frankel demonstrates this manner by analyzing the impact of commodity prices on government spending and institutional distortions—from marketing agencies to procyclicality of expenditures [Frankel, 2010]. Postcolonial methodology prefers textual, ethnographic, and discursive approaches; it is interested in how cultural representations institutionalize and reproduce inequality at the level of subjectivity and practice.

Nevertheless, the balance of power between "structure" and "discourse" is not always binary. Kapoor notes that both traditions "share important common concerns—a suspicion of Western liberal modernity, a historical-global analysis, and a critical politics" [Kapoor, 2002]. In practice, this means one can simultaneously analyze how economic dependency forms through international trade and how colonial discourses legitimize the corresponding political economy. Synthesis variants can be found in works attempting to link world system with cultural forms of domination, for example in Wallerstein and Arrighi [Wallerstein] [Arrighi].

The empirical consequences of these paradigms for policy differ radically. Dependency theorists propose structural interventions: industrialization with internal market protection, agrarian reform, limitation of direct foreign control—attempts to "break" the system of low-paid raw material export. However, Frankel shows that many institutional attempts to regulate markets—marketing boards, subsidies, or high taxation of the commodity sector—often failed and grew into distortions that exacerbate stagnation and corruption [Frankel, 2010]. Auty and others pointed to "rent cycling" as an explanation why rent revenues are not invested in long-term development.

Postcolonial politics bets on restitution of the right to representation, decolonization of knowledge, and symbolic processing of historical trauma; its tasks are to change discursive conditions of possibility for political and economic agency. Ball-Rokeach warns that in a "world of conflicts and changes" local networks’ selectivity is limited, so changing media and cultural schemes becomes a necessary condition for forming new collective capacities [Ball-Rokeach, 1998]. This approach does not necessarily oppose material reforms but prioritizes restoring autonomous subjectivity as a prerequisite for rational economic action.

Critical syntheses of the last decade show that ignoring either the material base or discursive conditions leads to analytical failures. For example, purely institutional explanations may miss how cultural stereotypes legitimize economic policy; conversely, focusing exclusively on discourse does not explain why transnational capital remains capable of dictating production and distribution conditions. Researchers appealing to combined frameworks (Cardoso & Faletto, Wallerstein) demonstrate that one must consider both international structures and local forms of power and representation [Cardoso] [Faletto].

Empirical research practice advises caution in applying recipes. Frankel lists institutional measures against commodity shocks and shows many tools either do not work or have side effects—from ineffective marketing boards to politically irreversible public sector growth during booms [Frankel, 2010]. This confirms dependency theorists’ thesis that structural conditions create rigid development trajectories; simultaneously, such empirics do not negate postcolonial concerns about representation and legitimation of political decisions.

The last analytical turn is the transition from opposition "structure vs discourse" to searching for mechanisms of their interaction: how discourses construct normative frameworks in which structural interests reproduce, and how economic structures shape the field of possible discursive practices. This focus raises the question of combining institutional engineering, redistributive policies, and decolonization of public policy language—a conflictual but fruitful task for further theoretical synthesis.

Finally, a practical and theoretical challenge remains: which combinations of analytical tools provide the best forecasts and normative guidelines for overcoming inequality in specific societies? Formulating this question brings to the fore the next stage of criticism and final evaluation of dependency theory and its interaction with postcolonial thought—the topic of the next subsection.

Criticism and Limitations

The first concrete flaw is imprecise operationalization of key concepts: "dependency," "development/underdevelopment" are often used simultaneously as diagnosis and explanation, which gives the theory risks of tautology and non-falsifiability. In practice, this leads to empirical tests turning into a selection of confirmations (cases that fit the narrative) rather than strict testing of causal links: conclusions about systemic "value extraction" are easy to interpret as phenomenon descriptions but hard to match with independent cause indicators. Counterarguments include Cardoso’s critique of the risk of formalization and creating a "straw man" of the theory, as well as Namkoong’s remark on circular logic [Cardoso, 1977]; Kvangraven points out that some misunderstandings stem from erroneous reductions of the tradition by critic authors [Kvangraven, 2020]. An open empirical question: which operational indicators and temporal sequences reliably separate causal dependency (external constraints) from consequences of its reproduction, and why is it difficult to construct them? The answer is complicated by the need to compare multidimensional historical data (trade, capital flows, institutional shifts, class configurations) across countries with different documentation and time scales.

Another significant weakness is early dependency’s tendency toward economic reductionism and underestimation of cultural-discursive factors and agency of local actors. When analysis focuses predominantly on trade flows and profit repatriation, explanations are lost as to why some peripheries develop active state modernization strategies while others are dominated by oligarchic patterns; this shifts normative implications—from radical rejection of embedding to recipes ignoring local political possibilities. The response to this criticism direction includes works introducing agentic and institutional mechanisms: Cardoso and Faletto show the possibility of "associated dependent development," Evans analyzes the triple alliance in Brazil, and Kapoor proposes dialogue with the postcolonial perspective emphasizing discourse and representation [Cardoso, 1977]. An unresolved methodological question: how to empirically integrate levels—world flows, national institutions, and local discourses—so as to simultaneously explain structural conditioning and agentic variability? The difficulty lies in requiring multilevel data and coordinated causal inference procedures where qualitative and quantitative evidence must be comparable in processual trajectories.

Finally, a significant limitation is the tendency to universalize the historical-systemic model, which conceals intragroup variability of peripheral modernization trajectories and produces deterministic conclusions. If conclusions are formulated in the spirit that embedding in the world system inevitably produces stagnation, then contradictory cases (e.g., successful industrialization of several Asian countries) deal a significant blow to the theory; Kay and Kvangraven call to distinguish different branches and sub-schools of dependency and treat it as a research program allowing variability [Kay, 2011]. This interpretative shift means that without accounting for contextual modifiers (structural position, state policy, international conditions), conclusions about inevitability of underdevelopment will be false or misleading. A specific empirical question remains open: which combinations of conditions (causal conjunctures) truly explain why some peripheries transform into industrial hubs while others remain locked in commodity specialization? The difficulty of verifying this hypothesis is linked to the need to reconstruct counterfactuals and compare processes considering long time series, requiring coordinated historical-comparative methodologies and access to heterogeneous data.

Conclusions

• Dependency theory in its original form offered a radical critique of modernization paradigms, arguing that peripheral underdevelopment is a direct consequence of its integration into the world capitalist system, not a result of internal deficits [Frank, 1978].
• The key mechanism of underdevelopment reproduction was recognized as unequal exchange, whereby value systematically flows from peripheral countries to core countries, hindering autonomous capital accumulation and industrialization in the periphery [Frank, 1978].
• Despite common Marxist roots, dependency theory developed as a multifaceted research program, including both rigid structural-determinist versions (e.g., Frank) and more flexible approaches allowing "dependent development" and the role of internal actors (e.g., Cardoso and Evans) [Kvangraven, 2020].
• Criticism of dependency theory often relied on simplified understandings of its propositions, accusing it of tautology, economic reductionism, and underestimation of agency; however, internal debates and empirical research contributed to refinement and enrichment of its conceptual apparatus [Cardoso, 1977].
• Dependency theory differs from postcolonial theory in its emphasis on structural-economic aspects of inequality, whereas postcolonial theory focuses on discursive and cultural mechanisms of domination, though both traditions share critique of Western modernity [Kapoor, 2002].
• How to reconcile the structural determinism of early dependency theory with observed cases of successful industrialization in peripheral countries, and which specific mechanisms (economic, political, institutional) explain these divergences?