What is the 'dependency theory' and how does it explain persistent underdevelopment in some regions?

What is the 'dependency theory' and how does it explain persistent underdevelopment in some regions?

• A. Explains that resources flow from periphery to core countries, creating dependence and underdevelopment in poor regions; core countries extract value through trade and capital.
• B. Claims development is solely due to domestic policy.
• C. Argues periphery nations are inherently less capable.
• D. Claims technology is the sole driver.

Answer: (A)

The main idea is that dependency theory explains persistent underdevelopment by looking at how wealth and resources are distributed within the global economy. It argues that core, wealthy countries extract value from poorer periphery regions through trade, investment, and financial flows, so resources flow from the periphery to the core. This unequal exchange creates dependence: the periphery relies on the core for capital, technology, and markets, while the core accumulates more wealth. Because these international power relations shape prices, terms of trade, and access to investment, underdevelopment in poorer regions persists even when local policies improve. The theory highlights structural constraints imposed by the global system, such as vulnerability to commodity price swings and limited opportunities to diversify economies away from core-driven interests. This differs from the other views that blame development on internal policy alone, innate inferiority, or technology as the sole driver.

The main idea is that dependency theory explains persistent underdevelopment by looking at how wealth and resources are distributed within the global economy. It argues that core, wealthy countries extract value from poorer periphery regions through trade, investment, and financial flows, so resources flow from the periphery to the core. This unequal exchange creates dependence: the periphery relies on the core for capital, technology, and markets, while the core accumulates more wealth. Because these international power relations shape prices, terms of trade, and access to investment, underdevelopment in poorer regions persists even when local policies improve. The theory highlights structural constraints imposed by the global system, such as vulnerability to commodity price swings and limited opportunities to diversify economies away from core-driven interests. This differs from the other views that blame development on internal policy alone, innate inferiority, or technology as the sole driver.