Dependency theory

Definition

Dependency theory is an economic and social theory that suggests that the economic development of a country is directly linked to its relationships with more developed nations. This perspective emphasizes that resources flow from periphery nations, often rich in natural resources, to core nations, leading to a cycle of dependency and underdevelopment. The theory critiques traditional models of economic growth by highlighting how unequal relationships contribute to persistent inequalities and hinder genuine development in less affluent countries.

5 Must Know Facts For Your Next Test

1. Dependency theory emerged in the late 1950s and 1960s as a response to modernization theory, which suggested that all countries follow a linear path of development.
2. According to dependency theorists, countries in the periphery are often exploited for their resources while receiving little benefit from the wealth generated in core nations.
3. This theory argues that underdevelopment is not just a stage of growth but is a result of historical exploitation and systemic inequalities.
4. Key figures associated with dependency theory include Andre Gunder Frank and Immanuel Wallerstein, who contributed significantly to its development and application.
5. Critics argue that dependency theory can lead to a fatalistic view of underdevelopment, suggesting that periphery nations have little agency in improving their circumstances.

Review Questions

• How does dependency theory challenge traditional views of economic development?
  • Dependency theory challenges traditional views by asserting that underdevelopment is not merely a stage on the path to growth but a consequence of exploitative relationships between developed and developing nations. It highlights how peripheral countries are integrated into the global economy in ways that benefit core nations at their expense. This perspective shifts the focus from internal factors within peripheral countries to the external influences and historical contexts that shape their development.
• Discuss the implications of dependency theory for understanding global inequalities.
  • The implications of dependency theory for understanding global inequalities are significant as it reveals how historical exploitation continues to affect current economic conditions. By highlighting the systemic nature of these inequalities, it becomes clear that wealth flows from poorer to richer countries, perpetuating cycles of poverty and dependence. This perspective encourages a reevaluation of policies aimed at addressing global disparities, emphasizing structural changes rather than mere financial aid or investment.
• Evaluate how dependency theory can inform strategies for sustainable development in peripheral nations.
  • Evaluating how dependency theory can inform strategies for sustainable development reveals that genuine progress must address the root causes of dependency. Strategies should focus on fostering local industries, promoting self-sufficiency, and reducing reliance on foreign investments that may perpetuate inequalities. Moreover, it encourages collaboration among peripheral nations to strengthen their positions within the global economy, potentially leading to more equitable trade practices and political alliances that challenge core dominance.

Related terms

Core-periphery model: A conceptual framework that categorizes countries into core nations, which are economically developed and dominant, and peripheral nations, which are less developed and reliant on the core for economic activities.

World-systems theory: A socio-economic framework that expands on dependency theory by analyzing the global economic system as a complex interdependence of core, semi-periphery, and periphery countries.

Neo-colonialism: The practice where former colonial powers maintain influence over their former colonies through economic, political, or cultural pressures, reinforcing dependency and hindering true autonomy.