Dependency theory

Definition

Dependency theory is a social science theory that suggests the economic development of a country is hindered by its dependence on more developed countries. This theory argues that resources flow from the periphery of poorer countries to the core of wealthier nations, leading to a cycle of dependency and underdevelopment. It highlights how historical colonial relationships continue to shape contemporary economic dynamics, often perpetuating inequality.

5 Must Know Facts For Your Next Test

1. Dependency theory emerged in the late 1950s and 1960s as a critique of modernization theory, arguing that development is not linear and can be negatively impacted by external influences.
2. It posits that rich countries exploit poorer countries for their resources, labor, and markets, which creates a cycle of poverty and dependency.
3. The theory emphasizes historical context, suggesting that colonialism laid the groundwork for modern dependency relationships by establishing economic structures favoring colonizers.
4. Scholars like Andre Gunder Frank and Samir Amin were influential in developing dependency theory, pointing out the unequal exchange between nations.
5. Dependency theory has faced criticism for oversimplifying complex global dynamics and not adequately addressing internal factors affecting development in poorer nations.

Review Questions

• How does dependency theory explain the ongoing economic challenges faced by developing nations?
  • Dependency theory explains that developing nations often struggle with economic challenges due to their reliance on developed countries for trade, investment, and technology. This dependence creates an imbalance where profits and resources are siphoned off to wealthier nations, leaving developing countries with limited capacity to grow independently. As a result, these nations may remain trapped in cycles of poverty and underdevelopment, failing to achieve true economic autonomy.
• Discuss the relationship between dependency theory and neocolonialism in shaping global economic dynamics.
  • Dependency theory is closely linked to neocolonialism as both concepts examine how historical exploitation continues to affect modern economies. Neocolonialism suggests that even after formal independence, former colonies remain economically dependent on their former colonizers through unequal trade relations, foreign investment practices, and resource extraction. This dynamic reinforces the patterns identified in dependency theory, highlighting how contemporary power structures maintain inequality between nations.
• Evaluate the effectiveness of dependency theory in explaining the complex relationships between developed and developing countries in today's global economy.
  • Evaluating the effectiveness of dependency theory reveals its strengths and weaknesses in explaining current global relationships. On one hand, it effectively highlights the historical context of exploitation that influences contemporary economic disparities. However, critics argue that it may oversimplify the intricacies of global trade and development by not fully considering internal factors within developing nations that contribute to their economic situations. A comprehensive understanding requires integrating elements from other theories like World Systems Theory to address both external dependencies and local conditions affecting development.

Related terms

Core-Periphery Model: A model that describes the relationship between economically developed 'core' regions and underdeveloped 'periphery' regions, illustrating how wealth and resources are concentrated in the core.

Neocolonialism: The practice of using economic, political, and cultural pressures to control or influence other countries, particularly former colonies, without direct military or political rule.

World Systems Theory: A macro-scale approach to understanding the world that categorizes countries into core, semi-periphery, and periphery based on their economic and political power within a global context.