Dependency theory

Definition

Dependency theory is an economic and sociological concept that suggests that the economic development of countries is heavily influenced by their historical and structural relationship with more developed nations. It posits that resources flow from the periphery of poor, underdeveloped nations to the core of wealthy nations, creating a cycle of dependence that hampers the development of the poorer countries. This theory highlights the inequalities in global economic systems and seeks to explain why certain nations remain stagnant while others thrive.

5 Must Know Facts For Your Next Test

1. Dependency theory emerged in the late 1950s and 1960s as a critique of modernization theories that suggested all nations would eventually develop similarly.
2. The theory argues that historical exploitation through colonialism has created lasting economic structures that continue to disadvantage developing nations.
3. Key figures associated with dependency theory include economists like Andre Gunder Frank and Immanuel Wallerstein.
4. Dependency theorists often advocate for policies promoting self-sufficiency and local resource control as a means to break the cycle of dependency.
5. Critics of dependency theory argue that it oversimplifies complex global relationships and ignores internal factors affecting development.

Review Questions

• How does dependency theory explain the persistent inequalities between developed and developing nations?
  • Dependency theory explains persistent inequalities by emphasizing how resources are extracted from developing countries and funneled to developed nations, creating a cycle of dependence. This unequal relationship prevents developing countries from achieving sustainable economic growth and development. By focusing on historical exploitation and current structural constraints, dependency theorists argue that external forces maintain this imbalance, resulting in chronic poverty and underdevelopment.
• Evaluate the implications of dependency theory for international aid policies in developing countries.
  • Dependency theory suggests that traditional international aid can sometimes perpetuate dependency rather than foster genuine development. Aid may reinforce existing power structures and create reliance on external resources instead of promoting local capacity building. Evaluating aid through this lens encourages policymakers to consider alternatives that empower developing nations, such as investing in local industries or supporting grassroots movements, to enable them to achieve self-sufficiency and break free from cycles of dependence.
• Assess the relevance of dependency theory in understanding contemporary global economic challenges, such as trade imbalances or debt crises.
  • Dependency theory remains relevant today as it provides a framework for understanding contemporary global economic challenges like trade imbalances and debt crises. These issues often reflect the ongoing extraction of resources from poorer nations to wealthier ones, maintaining the cycle of dependency. By assessing current economic policies and international relations through the lens of dependency theory, scholars can identify systemic inequalities that contribute to these challenges and advocate for reforms aimed at promoting equitable trade practices and sustainable economic independence for developing countries.

Related terms

World-systems theory: A sociological perspective that extends dependency theory, proposing that there is a world economic system divided between a core of wealthy nations, a periphery of poorer nations, and a semi-periphery that acts as a buffer.

Neocolonialism: The practice of using economic, political, and cultural pressures to control or influence developing countries, often seen as a modern form of colonialism.

Structural adjustment programs: Economic policies imposed on developing countries by international financial institutions, aimed at fostering economic stability and growth but often criticized for perpetuating dependency.