Dependency theory, a concept rooted in the work of Paul A. Baran, is the idea that resources come to a "core" of wealthy states from a "periphery" of poor states. In general, few scholars are still full proponents of this theory, though they still see it as a useful way...
Dependency theory, a concept rooted in the work of Paul A. Baran, is the idea that resources come to a "core" of wealthy states from a "periphery" of poor states. In general, few scholars are still full proponents of this theory, though they still see it as a useful way to organize the concept of global wealth inequities.
Below are some reasons why some may agree or disagree with this theory.
Dependency theory gained traction in the 1960s as a possible explanation of the lack of development in South America. Someone who agrees with dependency theory may do so because they strongly reject modernization theory, which suggests that underdeveloped countries just need to follow the same path as their developed peers. Dependency theorists may take their position because they see the exploitation of poorer nations for the benefit of richer nations. They also recognize the cyclical nature of this exploitation and feel that the cycle must be broken if poorer countries are to develop. A dependency theorist will typically fall into either a leftist reformer or Marxist belief camp. Leftist reformers feel that targeted policies can break the cycle, while Marxists believe that only a command economy can end it. They will argue for self-sufficiency and more government intervention.
Free market economists are most likely to disagree with dependency theory. Typical arguments against dependency theory solutions are lack of competition, sustainability, and domestic opportunity costs.
Where dependency theorists will support the idea of self-sufficiency and countries relying on internal production, those who disagree feel that this lack of competition will lead to inflated prices and poorer goods. The idea of self-sufficiency is also unsustainable in their eyes, as many poorer nations just don't have the capital needed to accomplish this. Finally, they will also argue that the opportunity costs are too great; governments could use their capital more wisely and more beneficially if it was not tied up in solely domestic pursuits.