Q.

3 Explain the meaning of Dependency Theory and describe the

relationship with World System Theory?

What is dependency Theory?

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.

Assumption
Dependency theory emerged in the 1950s and argues that the underdevelopment of poor nations
in the Third World derived from systematic imperial and neo-colonial exploitation of raw
materials. Its proponents argue that resources typically flow from a "periphery" of poor and
underdeveloped states to a "core" of wealthy states, enriching the latter at the expense of the
former.

The theory arose as a reaction to modernization theory, an earlier theory of development which
held that all societies progress through similar stages of development, that today's
underdeveloped areas are thus in a similar situation to that of today's developed areas at some
time in the past, and that, therefore, the task of helping the underdeveloped areas out of poverty
is to accelerate them along this supposed common path of development, by various means such
as investment, technology transfers, and closer integration into the world market. Dependency
theory rejected this view, arguing that underdeveloped countries are not merely primitive
versions of developed countries, but has unique features and structures of their own; and,
importantly, are in the situation of being the weaker members in a world market economy.
Dependency theory no longer has many proponents as an overall theory, but some writers have
argued for its continuing relevance as a conceptual orientation to the global division of wealth.

Claims
1. Dependency theory claims to be a globally applicable, objective approach to
understanding how the poorer nations have been deceived and victimized by a
unidirectional exercise of power.

2. Dependency theory views educational structures and education content as essential means
by which the center exercises thought control over the periphery, reproducing the
 conditions for its survival and advancement. These means operate not only in obvious
ways, but also in ways that are extremely subtle.

3. Dependency theory claims to show that the process of thought control is so powerful that
parents and citizens are incapable of recognizing their children's best educational interest,
and are helpless to make independent choices in the face of overwhelming ideological
hegemony.

4. Dependency theorists tend to deny that we can look to education or educational reform in
any important degree for improvement in this state of things: radical (and even violent)
rupture of the hegemonic power of the center is required.

5. Dependency theory asserts that the countries on the periphery represent victimized 'good
guys'; those at the center are the victimizing 'bad guys'. The latter force so-called
modernization on the former, but in fact the fruits of modernization are simply further
dependency.

6. Dependency theory claims that the greater a country's degree of dependency, the greater
will be a country's difficulties in establishing effective social and educational institutions.

Dependency theory has been criticized by free-market economists such as Peter Bauer and
Martin Wolf and others: In its extreme form, dependency theory is based on a Marxist view of
the world, which sees globalization in terms of the spread of market capitalism, and the
exploitation of cheap labour and resources in return for the obsolete technologies of the West.
The dominant view of dependency theorists is that there is a dominant world capitalist system
that relies on a division of labour between the rich 'core' countries and poor 'peripheral' countries.
Over time, the core countries will exploit their dominance over an increasingly marginalized
periphery.

Criticism
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.

Sustainability. Industries reliant on government support may not be sustainable for very
long, particularly in poorer countries and countries which largely depend on foreign aid
from more developed countries.

Domestic opportunity costs. Subsidies on domestic industries come out of state coffers
and therefore represent money not spent in other ways, like development of domestic
infrastructure, seed capital or need-based social welfare programs. At the same time, the
higher prices caused by tariffs and restrictions on imports require the people either to
forgo these goods altogether or buy them at higher prices, forgoing other good.
 Market economists cite a number of examples in their arguments against 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, The and
Commanding Heights). India's example seems to contradict 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. South Korea and North Korea provide.

The Relationship between Dependency Theory and World System

Theory
The main assumptions of the world-systems theory establish that a) there is a strong
link between social sciences - especially among sociology, economics and political
disciplines. This school recognizes that more attention is usually given to the individual
development of each one of these disciplines rather than to the interaction among them
and how these interactions affect in real terms the national conditions of a given society
b) Instead of addressing the analysis of each of the variables, it is necessary to study the
reality of social systems c) It is necessary to recognize the new character of the capitalist
system. For example, the approach followed by the classical political economy
perspective is based on the conditions of the capitalist system during the industrial
revolution in the United Kingdom. There was concrete evidence to support open
competition, more productive patterns in the industrial sector, and wide groups of
population which provided labor for the new established factories.
The Relationship between Dependency and world systems theories shares a common
emphasis on global analysis and similar assumptions about the nature of the international
system and its impact on national development in different parts of the world, but they
tend to emphasize different political dynamics. Dependency theorists tend to focus on the
power of transnational classes and class structures in sustaining the global economy,
whereas world systems analysts tended to focus on the role of powerful states and the
interstate system.