How do dependency theories explain underdevelopment?

Dependency theories explain underdevelopment as a result of exploitative relations between developed and developing countries.

Dependency theories emerged in the late 1950s as a response to modernisation theories, which suggested that all societies progress through similar stages of development. These theories, however, were criticised for ignoring the historical and structural relationships between countries that could hinder development. Dependency theories, therefore, offer a different perspective, arguing that underdevelopment is not a stage but a condition created and maintained by global economic structures.

According to dependency theories, developed countries, often referred to as the 'core', exploit developing countries, or the 'periphery', through economic practices such as unfair trade, debt, and investment rules. This exploitation results in a flow of resources from the periphery to the core, leading to wealth accumulation in developed countries at the expense of developing ones. This unequal exchange, dependency theorists argue, is a key reason for the persistent underdevelopment in many parts of the world.

For instance, multinational corporations from developed countries often extract natural resources from developing countries, paying little for these resources and selling the finished products at a much higher price. This practice, dependency theorists argue, leads to a drain of wealth from developing countries, leaving them impoverished and dependent on the core for their economic survival.

Moreover, dependency theories highlight the role of international institutions such as the International Monetary Fund and the World Bank in maintaining this exploitative relationship. These institutions, they argue, impose policies that favour the interests of developed countries, further exacerbating the economic disparities between the core and the periphery.

In conclusion, dependency theories provide a critical perspective on global economic relations, arguing that underdevelopment is not a natural condition but a result of exploitative practices by developed countries. They call for a restructuring of these relations to allow for a more equitable distribution of global wealth and resources.