Dependency Theory

Definition

Dependency Theory is an economic and social theory that suggests that the development of some countries is contingent upon the exploitation and underdevelopment of others, particularly in the context of a global capitalist economy. It argues that resources flow from peripheral, underdeveloped countries to core, developed countries, leading to a cycle of dependency and hindering true development in those peripheral nations.

5 Must Know Facts For Your Next Test

1. Dependency Theory emerged in the late 1950s and 1960s as a critique of modernization theories, which suggested that all countries follow a linear path of development.
2. The theory emphasizes that global capitalism perpetuates inequality by keeping developing nations reliant on developed nations for resources and markets.
3. Critics argue that Dependency Theory can be overly simplistic, ignoring internal factors within developing nations that contribute to their underdevelopment.
4. The idea of dependency is often illustrated through historical examples such as colonial exploitation, where colonizers extracted resources from colonies while leaving them impoverished.
5. Dependency Theory has influenced development policies and strategies in many Latin American countries, where governments sought to reduce dependency through import substitution industrialization (ISI).

Review Questions

• How does Dependency Theory explain the relationship between developed and developing countries?
  • Dependency Theory explains that developed countries maintain their wealth and power by exploiting developing nations. Resources are extracted from these peripheral countries, which results in their continued underdevelopment. This creates a cycle where developing nations remain dependent on developed ones for financial aid, technology, and markets for their goods, ultimately hindering their ability to develop independently.
• Evaluate the criticisms of Dependency Theory in the context of global development strategies.
  • Critics of Dependency Theory argue that it oversimplifies the complexities of global development by attributing underdevelopment solely to external factors. They point out that internal issues like corruption, poor governance, and lack of infrastructure also play significant roles. Additionally, some believe that focusing exclusively on external dependencies can lead to neglecting potential paths for growth within developing nations themselves.
• Discuss how Dependency Theory has shaped economic policies in Latin America and its impact on agricultural practices.
  • Dependency Theory has significantly influenced economic policies in Latin America, especially through strategies aimed at reducing dependency on foreign powers. For instance, many countries adopted import substitution industrialization (ISI) to promote local industries and reduce reliance on imported goods. This had direct impacts on agricultural practices as nations sought to develop their agricultural sectors to achieve self-sufficiency. However, this shift often faced challenges such as inefficiencies in production and resistance from established agricultural import markets.

Related terms

Core-Periphery Model: A model that describes the spatial distribution of economic power, where core regions are wealthy and technologically advanced while peripheral regions are poorer and dependent on the core.

Neo-colonialism: The practice of using economic, political, and cultural pressures to control or influence countries, often former colonies, without direct military or political control.

Globalization: The process by which businesses or other organizations develop international influence or operate on an international scale, often leading to increased economic interdependence among countries.