Dependency theory

Definition

Dependency theory is a social and economic theory that suggests that the wealth of developed countries comes at the expense of developing countries, which are often trapped in a cycle of poverty and dependence. It highlights how global inequalities are maintained through economic and political structures that favor the rich nations, leading to a disparity in development and opportunities for poorer nations.

5 Must Know Facts For Your Next Test

1. Dependency theory emerged in the 1950s and 1960s as a critique of modernization theory, which suggested that all countries could develop similarly.
2. One key idea is that developing countries are often exploited for their resources, labor, and markets by multinational corporations from developed nations.
3. The theory argues that foreign aid can sometimes reinforce dependency rather than alleviate it, as it can lead to debt and hinder local development efforts.
4. It emphasizes historical contexts such as colonialism and imperialism that have shaped current global economic structures.
5. Dependency theory has been influential in shaping policies aimed at promoting more equitable development practices and understanding global inequality.

Review Questions

• How does dependency theory explain the relationship between developed and developing countries?
  • Dependency theory explains that developed countries maintain their wealth through the exploitation of developing nations, creating a cycle where poorer countries remain dependent on richer nations. This relationship is marked by unequal exchanges, where resources flow from developing countries to developed ones, inhibiting the former's growth and development. The theory highlights structural factors such as economic policies and international trade practices that perpetuate this imbalance.
• Evaluate the critiques of dependency theory and discuss alternative perspectives on global development.
  • Critics of dependency theory argue that it can be overly deterministic and does not account for the agency of developing countries in pursuing their own paths to growth. Alternatives such as modernization theory suggest that developing nations can achieve progress through adopting Western-style industrialization. However, dependency theorists counter that focusing solely on internal factors ignores the significant external pressures that shape the development landscape, emphasizing the need for a balanced approach in understanding global inequalities.
• Assess how dependency theory informs current discussions about globalization and development policies in the context of global inequality.
  • Dependency theory is crucial in current discussions about globalization as it critiques how global economic integration often benefits wealthy nations while further marginalizing poorer ones. It provides insights into how trade agreements, investment patterns, and multinational corporations can exacerbate existing inequalities. By understanding these dynamics, policymakers can craft development strategies that aim to reduce dependency and promote sustainable growth, advocating for more equitable resource distribution and fairer economic practices on a global scale.

Related terms

Core-Periphery Model: A model that describes the relationship between wealthy, developed 'core' countries and less developed 'periphery' countries, emphasizing how resources flow from periphery to core.

Neocolonialism: The practice of using economic, political, and cultural pressures to control or influence other countries, often following the end of formal colonialism.

Globalization: The process by which businesses or other organizations develop international influence or operate on an international scale, often impacting economic dependency.