development models - dependency theory

Dependency theory - An Overview

Dependency refers to over reliance on another nation. Dependency theory uses political and economic theory to explain how the process of international trade and domestic development makes some LDC's ever more economically dependent on developed countries ("DC's").

Dependency theory refers to relationships and links between developed and developing economies and regions.

Dependency theory sees underdevelopment as the result of unequal power relationships between rich developed capitalist countries and poor developing ones.

Powerful developed countries dominate dependent powerless LDC's via the capitalist system. In the Dependency model under development is externally induced (ie DC not LDC’s fault) system. Growth can only be achieved in a closed economy and pursue self-reliance through planning.

Dominant DC's have such a technological and industrial advantage that they can ensure the ‘rules of the game’ (as set out by World Bank and IMF) works in their own self interest.

This partly explains the hostility shown towards the WTO in Seattle in 1999.

In this model under development is externally induced (ie DC not LDC’s fault) and only a break up of the world capitalist system and a redistribution of assets (eg elimination of world debt) will ‘free’ LDC's