Dependency Theory

Definition

Dependency theory is a social science theory that posits that the economic development of countries is influenced by their relationships with wealthier nations, leading to a state of dependency. It argues that resources flow from peripheral countries (often developing nations) to core countries (often developed nations), resulting in the latter's wealth and the former's underdevelopment. This framework highlights the inequalities in global economic relationships and critiques traditional development models that overlook these dynamics.

5 Must Know Facts For Your Next Test

1. Dependency theory emerged in the late 1950s and 1960s as a critique of modernization theory, emphasizing that development is not merely about adopting Western practices but also about addressing global power dynamics.
2. One key argument of dependency theory is that the historical exploitation of colonialism has created structural barriers to development in many countries.
3. The theory suggests that foreign aid can sometimes perpetuate dependency rather than promote genuine development, as it often reinforces existing power imbalances.
4. Dependency theorists argue for alternative development strategies that focus on self-sufficiency and reducing reliance on foreign investment and aid.
5. Key proponents of dependency theory include economists like Andre Gunder Frank and Samir Amin, who emphasized the need to analyze the global capitalist system's impact on developing nations.

Review Questions

• How does dependency theory challenge traditional notions of economic development?
  • Dependency theory challenges traditional notions of economic development by arguing that it is not solely a matter of adopting Western practices. Instead, it highlights how global inequalities and historical exploitation shape the development paths of countries. This perspective emphasizes that without addressing these systemic issues, merely following the steps of developed nations may not lead to true progress, but rather to further entrenchment in dependency.
• Evaluate the implications of dependency theory for foreign aid policies directed towards developing nations.
  • The implications of dependency theory for foreign aid policies suggest that aid can sometimes reinforce dependency rather than foster independent growth. It critiques conventional approaches that view aid as a straightforward solution, highlighting how it might support existing power structures and fail to address root causes of underdevelopment. To create meaningful change, policies must consider local contexts and aim for self-sufficiency rather than continued reliance on external assistance.
• Synthesize the key arguments of dependency theory with contemporary examples of global economic relations.
  • Synthesis of dependency theory's key arguments with contemporary examples reveals how many developing nations still experience economic marginalization despite globalization. For instance, countries rich in natural resources often find themselves exploited by multinational corporations that extract wealth while providing minimal local benefit. This reflects the core-periphery dynamic where resources flow outward, reinforcing dependency. Modern movements advocating for fair trade and sustainable practices aim to disrupt these patterns by empowering local economies and challenging exploitative relationships.

Related terms

Core-Periphery Model: A model that describes the spatial structure of an economy, where core regions are economically dominant and exploit peripheral regions for resources and labor.

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

Modernization Theory: A theory that suggests that developing countries can become more economically developed by adopting Western-style economic practices and technologies.