World Facts

What is the Dependency Theory?

The first documented information on dependency theory was published in 1949 by Hans Singer.

The Dependency Theory implies that the resources from poor states are used to develop the already rich states. Whenever resources are moved from a poor state, the state’s economy keeps deteriorating and the rich states keep enriching themselves. Thus, poor states are impoverished by the rich countries. Dependency theory became more popular and actualized in history during the 1960s and 70s.

Other Approaches Used To Define the Dependency Theory

Other than using the developed and the underdeveloped countries approach, a few other approaches have been used by different dependency theorists. For instance, the developed states might be referred to as dominant states whereas the underdeveloped states are referred to as dependant. Alternatively, the word “center” can be used to refer to the developed countries and “periphery” for the underdeveloped. The words "metropolitan" and "satellite" can also be used for the countries that are involved. In most cases, the dominant states are developed states, mostly in Europe and parts of the America whereas the dependant states are the countries in Latin America, Africa, and Asia. The dependant states are those with low income per capita GNP.The dominant states have stable economies, with a high income per capita.

History of Dependency Theory

The first documented information on dependency theory was published in 1949 by Hans Singer. Thereafter, Raul Prebisch published another work that explained the dependency theory and its shortcomings. In their papers, Raul and Singer explain the terms of trade between the developed and the underdeveloped countries. The developers of the theory were inspired by Marxists ideas. It is seen that the developed countries obtain some of their most valuable raw materials from the developing countries. In turn, the underdeveloped countries purchase the manufactured goods from the developed countries. In some instances, the goods are usually exchanged for raw materials. The practice of exchanging the raw materials for manufactured goods came to be known as Prebisch-Singer thesis.

Effects of the Dependency Theory

The dependency theory has been criticized for a number of reasons. In his book, “How Europe Underdeveloped Africa,” Walter Rodney explains how the dependency theory led to the current underdevelopment in most parts of the continent of Africa. He explains how the European Imperialist took resources and raw materials from Africa.According to Prebisch, the rich status of the developed countries is at the expense of the poor and underdeveloped countries.

The development of industries in the underdeveloped countries is hindered by the dependency concept. Whenever goods are imported from developed countries, the goods from the underdeveloped countries are likely to be pushed out of the market leading to the collapse of their industries

Disappearance of the Theory

In the recent past, the use of the concept of dependency theory has gradually disappeared. Since the collapse of communism in most countries in the 1990s, dependency has also reduced. The end of colonialism in Africa and Asia also discouraged dependency to a great extent. However, the concept of dependence is still ongoing, though to a lesser extent. Due to its disappearance, there are fewer proponents and writers who engage on the subject of dependency theory.

About the Author

John Misachi is a seasoned writer with 5+ years of experience. His favorite topics include finance, history, geography, agriculture, legal, and sports. 


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