Unit 3 Part 1 - Dependency Theory

also called _________________

World Systems theory

characteristic of governments that follow the dependency theory 3

subsidize industries as well as agriculture in the interest of self-sufficiency

consequence of self-sufficiency 1

governments borrow lots of money

rooted in _________________ and focused on _________________ as a whole

Marxism, world economy

criticizes assumptions of _________________

Modernization theory - particularly idea that underdeveloped countries simply need to copy developed countries in order to catch up

assumption 3

center became rich by exploiting periphery and has interest in maintaining unequal relationship in order to remain dominant

consequence of self-sufficiency 2

corruption and money wasting as state had much power in regulating economy

assumption 4

impossible for underdeveloped countries to simply "catch-up" as development of Western world was based on the exploitation of others

characteristic of governments that follow the dependency theory 2

overvalue their currencies in order to make the import of production inputs cheaper

characteristic of governments that follow the dependency theory 1

place high tariffs on imported goods to protect their own industries

consequence of self-sufficiency 3

serious pressure by Western governments and international financial institutions on developing countries to change their development strategies

critiques _________________

the lack of development many countries experienced in the post-independence years

assumption 1

underdeveloped and newly independent states are locked in an unequal global trading system - rich countries benefit more than poor countries

summative definition

underdeveloped nations could not copy Western nations in order to develop because they were being exploited by them --> led underdeveloped countries to adopt expensive policies to protect their economies

assumption 5

west has an interest in keeping countries poorer

assumption 2

world is divided into a center (former colonial powers and other Western industrialized countries) and a periphery (newly independent developing countries)