What is dependency theory?
Dependency theory emerged in the 1960s and 1970s as a response to the idea that “development” simply meant following the economic path of wealthier nations. Thinkers such as Andre Gunder Frank argued that underdevelopment is not something that exists before development. It is something produced through global economic relationships. The world economy is structured in a way that allows wealthier nations to grow by extracting resources, labour, and value from poorer ones.
Frank described the global system as one organised between a “core” and a “periphery.” The core consists of countries with financial power, industrial capacity, and control over trade. The periphery consists of countries whose economies are structured around supplying raw materials, agricultural products, and low-cost labour. Crucially, the core does not simply benefit from the periphery - it requires the periphery to remain in that position. The economic relationship depends on one side producing value and the other side capturing it.
This means underdevelopment is not an accident, a historical delay, or the result of internal failures. It is sustained by the way global trade, finance, infrastructure, logistics, and cultural authority are organised. Even when colonial rule ended, the structure remained. The legal and political form changed, but the underlying economic relationship continued. This is what is meant by neo-colonialism: the continuation of hierarchical relationships through markets.
Dependency theory is not only a critique of inequality. It is a claim about how power works. The “rules of the game” are set by those who benefit from them. Countries on the periphery are told to modernise, industrialise, and “move up the value chain,” but they are encouraged to do so within a system already designed to maintain the flow of value outward. Progress is permitted in ways that do not threaten the position of the core.
How coffee fits this structure
Coffee mirrors this dynamic closely. Most coffee is grown in so-called periphery regions, yet most of the value linked to the product is created elsewhere. The majority of profit is generated after coffee has left the producing country, during roasting, branding, distribution, and retail. Value accumulates where the coffee is transformed into a consumer product, not where it is cultivated. Research into global coffee value chains consistently shows that the highest margins sit with roasters and retailers in consuming markets. The design of the trade system has preserved this arrangement rather than challenging it.
Why “roasting at origin” is framed as the solution
In response to this imbalance, roasting coffee at origin is often presented as a way to retain more value in producing countries. The logic is clear. If producers roast and package the coffee themselves, they can sell a finished product rather than a raw commodity, and more revenue can remain within local economies. This idea appears regularly in development projects, marketing narratives, and speciality coffee discourse. It promises to correct the imbalance by shifting where value lands within the chain.
The structural barriers that prevent value being kept at origin
However, when roasting at origin is attempted in practice, the barriers become clear. Green coffee is stable and can travel for months by sea without significant quality loss. Roasted coffee begins to deteriorate within weeks and often needs to be transported by air, which is significantly more expensive. The difference in transport stability alone tilts the structure in favour of roasting happening closer to consumption.
Trade rules reinforce this. Within the EU, for example, green coffee enters tariff-free, while roasted coffee generally incurs a tariff of 9 percent. The stated reasoning is that value-adding activities should take place within the EU. The effect is that it becomes systematically more difficult for producers to export roasted coffee at competitive prices. The trade system preserves where value is added.
There are also regulatory barriers. Food safety, packaging, and labelling requirements are written according to consuming-market standards and languages. Compliance requires equipment, money, administrative capacity, and legal understanding. Many producer groups, especially those comprised of smallholders, do not have the infrastructure to meet these requirements at scale.
On top of this, the idea of “quality” in coffee is defined in consuming countries. Even if coffee is roasted exceptionally well at origin, the recognition, validation, and taste authority remain elsewhere. Cultural authority does not travel as easily as green coffee does.
How this links back to dependency theory
Dependency theory helps make sense of this. The issue is not a lack of ability, innovation, or ambition among producers. It is that ownership of processing capital, distribution networks, retail infrastructure, and quality definition sits in consuming countries. The trade rules and logistical routes were built around exporting raw agricultural goods, not finished products. So even when producers attempt to move “up the value chain”, they are still stepping into a system already organised to keep value elsewhere. The terms of participation remain controlled by the core. This is the development trap.
Why this matters now
There is increasing attention on producer-roasted coffee, origin-led branding, and changing whose stories are centred. These shifts genuinely matter. They reshape narrative and identity, and they signal a move away from treating producers as background to a product.
However, they operate within global structures that have not changed. For producer-based value creation to be viable in the long term, it would require access to local capital and roasting infrastructure, distribution pathways that do not rely on consuming-side gatekeepers, and a shift in who holds cultural authority over taste and meaning in coffee. Without these conditions, producing countries remain structurally positioned at the edges of the coffee economy, even though they remain essential to its existence.
