Geopolitics of Data and Digital Technologies: A Dependency Theory Analysis of Cross-border Data Flows and Data Localization

As data flows across borders become increasingly critical, governments are faced with the challenge of governing these flows while maximizing their economic and strategic benefits. This article applies dependency theory (Dos Santos, 1970, The American Economic Review, 60 , 231–236; Wallerstein, 1974, The modern world-system i: Capitalist agriculture and the origins of the European world-economy in the sixteenth century , University of California Press) as an analytical framework, examining how data flows and governance systems create and reinforce dependent relationships between countries. This framework proposes three categories of actors in the global economy: the core, periphery and semi-periphery. Originally developed to analyse colonial and post-colonial economic relationships, this theory can be used to examine how contemporary data governance may perpetuate global inequalities through new mechanisms. In this article, we extend the dependency theory framework to the global data economy, by analysing the evolving characteristics of the participating actors. Countries that control key technological infrastructure, set global standards and capture the majority of economic value from data flows can be characterized as the ‘core’. Countries which serve as data sources, with limited domestic technological capabilities and minimal value capture from their own data generation, would be considered the ‘periphery’. On the other hand, countries that are able to maintain a strategic and dynamic trade and regulatory positioning, can exhibit selective participation and have growing indigenous technological capabilities would form the ‘semi-periphery’. Through this article, we seek to apply dependency theory to analyse the global data economy and to situate India within it, highlighting its characteristics as an actor in the semi-periphery.