''''Dependency theory'''' is a body of social science theories, both from developed and developing nations, that create a worldview which suggests that poor underdeveloped states of the periphery are exploited by wealthy developed nations of the centre, in order to sustain economic growth and remain wealthy. Main International Relations Theories and derivates Realism & Neorealism Idealism, Liberalism & Neoliberalism Marxism & Dependency theory Functionalism & Neofunctionalism Critical theory & Constructivism International relations theory attempts to provide a conceptual model upon which international relations can be analyzed. ... It has been suggested that Defensive realism be merged into this article or section. ... Main International Relations Theories and derivates Realism & Neorealism Idealism, Liberalism & Neoliberalism Marxism & Dependency theory Functionalism & Neofunctionalism Critical theory & Constructivism Neorealism or structural realism is a theory of international relations, outlined by Kenneth Waltz in his 1979 book, Theory of International Politics. ... Main International Relations Theories and derivates Realism & Neorealism Idealism, Liberalism & Neoliberalism Marxism & Dependency theory Functionalism & Neofunctionalism Critical theory & Constructivism Former President of the United States Woodrow Wilson, considered to be a founder of idealism. ... It has been suggested that this article or section be merged with Liberal institutionalism. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... International Relations Theory Realism Liberalism Idealism Neoconservatism Institutionalism Functionalism Marxism Critical theory Isolationism Marxist and Neo-Marxist international relations theories are positivist paradigms which reject the realist/liberal view of state conflict or cooperation; instead focusing on the economic and material aspects. ... Critical international relations theory is a set of schools of thought in international relations that have criticized the status-quo – both from positivist positions as well as postpositivist positions. ... Main International Relations Theories Politics Portal This box:      In international relations, constructivism is the application of constructivist epistemology to the study of world affairs. ... International Relations Theory Realism Liberalism Idealism Neoconservatism Institutionalism Functionalism Marxism Critical theory Isolationism Functionalism is a theory of international relations that arose principally from the experience of European integration. ... Main International Relations Theories and derivates Realism & Neorealism Idealism, Liberalism & Neoliberalism Marxism & Dependency theory Functionalism & Neofunctionalism Constructivism Neofunctionalism is a theory of regional integration, building on the work of David Mitrany. ... The social sciences are groups of academic disciplines that study the human aspects of the world. ...

Dependency theory states that the poverty of the countries in the periphery is the result of how they are integrated into the world system, whereas free market economists argue that they are not 'fully' integrated. A free market is an idealized market, where all economic decisions and actions by individuals regarding transfer of money, goods, and services are voluntary, and are therefore devoid of coercion and theft (some definitions of coercion are inclusive of theft). Colloquially and loosely, a free market economy is an economy...

Basics

The premises of dependency theory are:

• Poor nations provide a destination for obsolete technology, and markets to the wealthy nations, without which the latter could not have the standard of living they enjoy.
• First World nations actively, but not necessarily consciously, perpetuate a state of dependence through various policies and initiatives. This is multifaceted, involving economics, media control, politics, banking and finance, education, sport, and all aspects of human resource development.
• Attempts by the dependent nations to resist the influences of dependency often result in economic sanctions and/or military invasion and control. Many dependency theorists advocate social revolution to effect change in economic disparity.

Dependency theory first emerged as a reaction to liberal free trade theories in the 1950s, advocated by Raúl Prebisch, whose research with the Economic Commission on Latin America (ECLA) found that the wealth of poor nations tended to decrease when the wealth of rich nations increased. Paul Baran developed dependency theory from Marxian analysis. The theory quickly divided into diverse schools. Some, like Andre Gunder Frank, adapted it to Marxism. "Standard" dependency theory differs sharply from Marxism, however, arguing against internationalism and any hope of progress in less developed nations towards industrialization and a liberating revolution. Theotonio Dos Santos described a 'new dependency', which focused on both the internal and external relations of less-developed countries of the periphery, derived from a Marxian analysis. Former Brazilian President Fernando Henrique Cardoso wrote extensively on dependency theory while in political exile, arguing that it was an approach to studying the economic disparities between the centre and periphery. The American sociologist Immanuel Wallerstein refined the Marxist aspect of the theory, and called it the "World-system." It is has also been associated with Galtung's Structural Theory of Imperialism. Face-to-face trading interactions on the New York Stock Exchange trading floor. ... The propaganda model is a theory advanced by Edward S. Herman and Noam Chomsky that alleges systemic biases in the mass media and seeks to explain them in terms of structural economic causes. ... Politics is the process by which groups make decisions. ... For other uses, see Bank (disambiguation). ... Finance studies and addresses the ways in which individuals, businesses, and organizations raise, allocate, and use monetary resources over time, taking into account the risks entailed in their projects. ... Human resources has at least two meanings depending on context. ... Economic sanctions are economic penalties applied by one country (or group of countries) on another for a variety of reasons. ... Raúl Prebisch (1901–1986) was an Argentine economist known for his contribution to structuralist economics, in particular the Prebisch-Singer hypothesis that formed the basis of economic dependency theory. ... Andre Gunder Frank (Berlin, February 24, 1929 – Luxembourg, April 23, 2005) was a German economic historian and sociologist who was one of the founders of the Dependency theory and the World Systems Theory in the 1960s. ... Marxismtakes its name from the praxis — the synthesis of philosophy and political action — of Karl Marx and Friedrich Engels. ... Fernando Henrique Cardoso (born June 18, 1931) was the President of the Federative Republic of Brazil for two terms from January 1, 1995 to January 1, 2003. ... Immanuel Maurice Wallerstein (born 28 September 1930, New York City) is a U.S. sociologist by credentials, but a historical social scientist, or world-systems analyst by trade. ... Unlike former sociological theories, which presented general models of social change with particular focus at the societal level, world-systems theory (or world system perspective) explores the role and relationships between societies (and the subsequent changes produced by them). ...

Spread of theory

Dependency theory became popular in the 1960s and 1970s as a criticism of modernization theory (also known as development theory) that seemed to be failing due to the continued widespread poverty of large parts of the world. With the seeming growth of the East Asian economies and India in the last few years, however, the theory has fallen somewhat out of favour. It disagrees sharply with classical and free-market economics. It is far more accepted in disciplines such as history and anthropology, which can count for or against it. It can also be detected in some of the reasoning underpinning recent NGO campaigns such as Make Poverty History and the Fair Trade movement. Modernization theory is a socio-economic theory, sometimes known as (or as being encompassed within) development theory, which highlights the positive role played by the developed world in modernizing and facilitating sustainable development in underdeveloped nations, often contrasted with dependency theory. ... development theory This page is a candidate for speedy deletion. ... History studies the past in human terms. ... Anthropology is the study of the physical and social characteristics of humanity through the examination of historical and present geographical distribution, cultural history, acculturation, and cultural relationships. ... NGO is an abbreviation or code for: Non-governmental organization Nagoya Airport (IATA code) This is a disambiguation page — a navigational aid which lists other pages that might otherwise share the same title. ... // The Make Poverty History campaign (which is written as MAKEPOVERTYHISTORY) was a British and Irish coalition of charities, religious groups, trade unions, campaigning groups and celebrities who mobilized around the UKs prominence in world politics in 2005 to increase awareness and pressure governments into taking actions towards relieving absolute... Certified Fair trade quinoa producers in Ecuador. ...

Dependency was said to be created with the industrial revolution and the expansion of European empires around the world due to superior power and accumulated wealth. Some argue that before this expansion, the exploitation was internal, with the major economic centres dominating the rest of the country (for example southeast England dominating Britain, or the Northeast United States dominating the south and west). Establishing global trade patterns in the nineteenth century allowed capitalism to spread globally. The wealthy became more isolated from the poor, because they gained disproportionately from imperialistic practices. This minimized the dangers of domestic peasant revolts and rebellions by the poor. Rather than turn on their oppressors as in the American Civil War or in communist revolutions, the poor could no longer reach the wealthy and thus the less developed nations became engulfed in regular civil wars. Once the imperialist rich nations established formal control, it could not be easily removed. This control ensures that all profits in less developed countries are remitted to the developed nations, preventing domestic reinvestment, causing capital flight and thus hindering growth. A Watt steam engine. ... Peasant revolt is a term with broad application, typically meaning uprisings of rural or agricultural people against an existing order or establishment. ... This article is becoming very long. ... This article is about communism as a form of society and as a political movement. ... A civil war is a war in which parties within the same culture, society or nationality fight against each other for the control of political power. ...

Implications

While there are many different and conflicting ideas on how developing countries can alleviate the effects of the world system, several of the following protectionist/nationalist practices were adopted at one time or another by such countries:

• Promotion of domestic industry and manufactured goods. By subsidizing and protecting industries within the periphery nation, these third-world countries can produce their own products rather than simply export raw materials.
• Import limitations. By limiting the importation of both luxury goods and manufactured goods that can be produced within the country, supposedly, the country can reduce the amount of its capital and resources that are siphoned off.
• Forbidding foreign investment. Some governments took steps to keep foreign companies and individuals from owning or operating property that draws on the resources of the country.
• Nationalization. Some governments have forcibly taken over foreign-owned companies on behalf of the state, in order to keep profits within the country.

A luxury good is a good at the highest end of the market in terms of quality and price. ... Wikipedia does not yet have an article with this exact name. ...

Criticism

Dependency theory has been criticized by free-market economists such as Peter Bauer and Martin Wolf, who believe it will lead to: Peter Bauer (born October 29, 1957) is perhaps best known as the Help Desk Director for the National Association of Photoshop Professionals (NAPP). ... Martin Wolf is an English journalist. ...

• Corruption. State-owned industries may have a higher rate of corruption than privately owned companies.
• Lack of competition. By subsidizing in-country industries and preventing outside imports, these companies may have less incentive to improve their products, to try to become more efficient in their processes, to please customers, or to research new innovations.

Proponents of dependency theory claim that the theory of comparative advantage breaks down when capital - including both physical capital like machines and financial capital - is highly mobile, as it is under the conditions of globalization. For this reason, it is claimed that dependency theory can offer new insights into a world of highly mobile multinational corporations. In economics, the theory of comparative advantage explains why it can be beneficial for two parties (countries, regions, individuals and so on) to trade if one has a lower relative cost of producing some good. ... A KFC franchise in Kuwait. ...

This is countered, however, by the argument that the conditions of globalization make comparative advantage all the more sound. Two of the key assumptions of comparative advantage - zero transportation costs and zero communication cost - are arguably more realistic in the contemporary global marketplace than in earlier times. Whilst zero communication costs are supported by the internet, it would appear, however, that the theory of the tendency to zero transport costs is a temporary feature of peak oil. Furthermore, the assumptions of free trade models only ever includes two factors of production - namely the globalisation of capital and resources, but not labour. Currently the free movement of labour is being restricted world-wide with various forms of immigration control. The Hubbert peak theory, also known as peak oil, is an influential theory concerning the long-term rate of conventional oil production and depletion. ... Factors of production are resources used in the production of goods and services in economics. ... In politics, a capital (also called capital city or political capital — although the latter phrase has a second meaning based on an alternative sense of capital) is the principal city or town associated with a countrys government. ... Look up Resource in Wiktionary, the free dictionary. ... Labour (Commonwealth English) or labor (American English) may refer to one of the following. ... Although human migration has existed for hundreds of thousands of years, immigration in the modern sense refers to movement of people from one nation-state to another, where they are not citizens. ...

Market economists point to many examples they claim disprove dependency theory: the improvement of India's economy after it moved from state-controlled business to open trade is one of the most often cited (see also economy of India, Commanding Heights). India's example seemingly contradicts dependency theorists' claims concerning comparative advantage and mobility, as much as its economic growth originated from movements such as outsourcing - one of the most mobile forms of capital transfer. However, South Korea was able to rise out of poverty using many tenets which Dependency theory advises. The economy of India is the fourth largest in the world as measured by purchasing power parity (PPP). ... Commanding Heights: The Battle for the World Economy is a book by Daniel Yergin and Joseph Stanislaw, first published in 1998. ... Outsourcing entered the business world in the 1980s and often refers to the delegation of non-core operations from internal production to an external entity specializing in the management of that operation. ...

Free market thinkers see dependency theorists' complaints as legitimate, but their policy prescriptions as self-fulfilling prophecies, in that the policies only aggravate the disparity between the developed nations and under-developed nations by isolating them from free markets. Liberal trade advocates see the current structure of capitalism and trade favoring the capital owners rather than consumers, but also believe that dependency theorists' prescriptions lead only to more wealth for the capital owners and more poverty for the third world; meaning that their advocacy of restricted trade and self development leads to the same outcome as mercantilist trade as experienced under colonialism. Free market thinkers criticize dependency theory because it conflates free market economics with current capitalist economic trading arrangements, and thus assumes that free market international trade will not increase economic growth and development. It has been suggested that Benign colonialism be merged into this article or section. ...

Dependency Theory has also been accused of being unfalsifiable according to the critera of philosopher Karl Popper and thus unscientific. ^[1] In science and the philosophy of science, falsifiability is the logical property of empirical statements, related to contingency and defeasibility, that they must admit of logical counterexamples. ... Sir Karl Raimund Popper, CH, FRS, FBA, (July 28, 1902 – September 17, 1994), was an Austrian born naturalized British[1] philosopher and a professor at the London School of Economics. ...

See also

• Sociocultural evolution
• Neocolonialism
• Unequal exchange

[[Image:Cultural evolution. ... Definition from Oxford English Dictionary: The use of economic, political, cultural, or other pressures to control or influence another country; esp. ... Unequal exchange is a concept used in Marxian economics to denote forms of exploitation which commercial trade of any type can involve, if objects of unequal value are being exchanged or traded. ...

External link

• An introduction to dependency theory

Footnotes