Dependency Theory

Dependency theory is the idea that resources flow from a periphery of poor and exploited states to a core of wealthy states, enriching the latter at the expense of the former. Its central contention is that poor states are held in poverty by the way they are fitted into the world system. Scholars developed it in the late 1940s, after the Second World War, while searching for the root cause of the lack of development in Latin America, and it arose as a reaction to modernization theory. Modernization theory held that every society passes through similar stages, so that poor regions are simply earlier versions of rich ones. Dependency theory rejected this view and argued that underdeveloped countries have structures of their own and sit as the weaker members of a world market economy. Its followers are commonly sorted into liberal reformists and neo-Marxists.