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POLSCI 1G06 (280)
Todd Alway (280)


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McMaster University
Political Science
Todd Alway

The modern global economy is characterized by both great wealth and great poverty. Certain states have high per capita incomes, developed infrastructures, and the international influence that comes along with this. Other states suffer through extreme destitution, economic vulnerability, and a seeming inability to benefit from the global economic system. How does dependency theory explain this divide? According to the theory, why are some states able to develop economically while others are underdeveloped? Why are some nations prosperous with all of life’s necessities as well as luxuries, while other nations live in extreme destitution and economic vulnerability? It is a common question that many ponder upon and will be the basis of this paper, highlighting and explaining dependency theory, as well as exploring attempts to solve this underdevelopment and suggest policies that may lead to development. Dependency theory is a theory of how developing and developed nations interact. It can be seen as an opposition theory to the popular free market theory of interaction. Dependency theory was first formulated in the 1950s, drawing on a Marxian analysis of the global economy, and as a direct challenge to the free market economic policies of the post-War era. Dependency theory, holds that there are a small number of established nations that are continually fed by developing nations, at the expense of the developing nations’ own health. For example, the economic development of European states only occurred because of the economic underdevelopment of non- European states. These developing nations are essentially acting as colonial dependencies, sending their wealth to the developed nations with minimal compensation. In dependency theory, the developed nations actively keep developing nations in a subservient position, often through economic force by instituting sanctions, or by proscribing free trade policies attached to loans granted by the World Bank or International Monetary Fund. Dependency theory was incredibly popular during the 1960s and 1970s, when the free market policies of development theory seemed to have led much of the developing world to the brink of economic collapse. In the 1990s, with the rising success of countries such as India and Thailand, dependency theory lost some support, as it appeared development theory may indeed have been working. These days, although not as popular as in its heyday, dependency theory is nonetheless widespread in progressive circles, particular among groups working on alternative modes of capitalism in the developing world. The critiques of dependency theory can be leveled within a nation as well as internationally. In fact, dependency theory tends to trace its roots to back before the emergence of modern post-colonialism. On an internal
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