Dependency Theory
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- Category: Politics: Economics
- Date Submitted: 12/04/2013 06:51 AM
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The first thing that needs to be said is that Dependency theory was advenced by a group of Latin American economists and sociologists. Famous Argentine economist R. Prebisch is founder of this theory.Dependency theory attempts to explain the nature and character of inequality between the first world countries and third world countries (or developing countries).
Usually distinguish two trends in dependency theory:
1) the American School of Marxism (P. Baran, A.G. Frank)
2) Hispanic (C. Furtado, F. Cardoso)
According to the version of Frank (1967), the cause of the problem of the "third world" were colonial and commercial domination of European countries and the United States. He criticized the view that economic development occurs in successive stages of the emergence of capitalism and that currently under-developed countries are still at the stage of history through which lmodern developed countries have already passed . According to Frank, giant business center (Europe and USA) operates the world . This center controls the less developed countries by extracting from them capital ,surplus products and raw materials. This policy prevents the development of national industry there.
In Brazil Dependency theory was used by Fernando Cardoso and Enzo Henrik Falletta (1979). Cardoso criticized the idea that countries like Brazil can not develop normally because of its cultural backwardness or the inability of local entrepreneurs. Actually causes of stagnation are that industry and finance are dependent on international sources.
All in all, according to some critics,these dependency theories are contrary to the economic growth of the four "Asian tigers" - South Korea, Singapore, Hong Kong and Taiwan - for which, however, later followed a serious economic crisis.
Usually distinguish two trends in dependency theory:
1) the American School of Marxism (P. Baran, A.G. Frank)
2) Hispanic (C. Furtado, F. Cardoso)
According to the version of Frank (1967), the cause of the problem of the "third world" were colonial and commercial domination of European countries and the United States. He criticized the view that economic development occurs in successive stages of the emergence of capitalism and that currently under-developed countries are still at the stage of history through which lmodern developed countries have already passed . According to Frank, giant business center (Europe and USA) operates the world . This center controls the less developed countries by extracting from them capital ,surplus products and raw materials. This policy prevents the development of national industry there.
In Brazil Dependency theory was used by Fernando Cardoso and Enzo Henrik Falletta (1979). Cardoso criticized the idea that countries like Brazil can not develop normally because of its cultural backwardness or the inability of local entrepreneurs. Actually causes of stagnation are that industry and finance are dependent on international sources.
All in all, according to some critics,these dependency theories are contrary to the economic growth of the four "Asian tigers" - South Korea, Singapore, Hong Kong and Taiwan - for which, however, later followed a serious economic crisis.