Scribd Logo
Upload

Welcome to Scribd!

  • Devt C

    Uploaded by

    suna
    5 views5 pages
    Dependency theory argues that resources flow from poorer developing countries (the periphery) to richer developed countries (the center), making it difficult for developing countries to industrialize and become self-sufficient. It claims that the center benefits and develops at the expense of the periphery by maintaining monopoly power over prices and trade, keeping prices low for goods it imports from developing countries and high for goods those countries import in return. This asymmetrical trade relationship causes developing countries to receive less for their exports and pay more for imports over time.

    Original Description:

    Original Title

    devt c

    Copyright

    © © All Rights Reserved

    Available Formats

    PPT, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    Dependency theory argues that resources flow from poorer developing countries (the periphery) to richer developed countries (the center), making it difficult for developing countries to industrialize and become self-sufficient. It claims that the center benefits and develops at the expense of the periphery by maintaining monopoly power over prices and trade, keeping prices low for goods it imports from developing countries and high for goods those countries import in return. This asymmetrical trade relationship causes developing countries to receive less for their exports and pay more for imports over time.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    5 views5 pages

    Devt C

    Uploaded by

    suna
    Dependency theory argues that resources flow from poorer developing countries (the periphery) to richer developed countries (the center), making it difficult for developing countries to industrialize and become self-sufficient. It claims that the center benefits and develops at the expense of the periphery by maintaining monopoly power over prices and trade, keeping prices low for goods it imports from developing countries and high for goods those countries import in return. This asymmetrical trade relationship causes developing countries to receive less for their exports and pay more for imports over time.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 5

    c) DEPENDENCY THEORY

    Dependency theories (1950’s, 60’s, 70’s

    • Center – developed countries and elites within


    developing countries
    • Periphery – poor in developing countries

    Center develops at the expense of the


    periphery
    Why dependency?
    • Center has monopoly power
    • Low price and income elasticities for goods
    produced by the periphery
    • High price elasticity of demand for goods
    imported by the periphery from the center
    Result: periphery receives less and less for
    exports and pays more and more for imports
    Dependency theory suggests that
    countries become self-sufficient

    What do you think?


    Lessons from each theory
    • Classical theory – savings & capital investment important
    – Diminishing returns to labor
    • Growth stage theories – structural change with
    development
    – Sequential growth stage
    • Dual economy theories – food is important, wage good
    – Surplus labor may facilitate capital formation
    – Technological change in agriculture is important
    • Dependency theories – interdependent world
    – History important
    – Political and social power important

    You might also like