Dependency theory

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Dependency theory is a theory that explain the situation in which the economy of certain countries is conditioned by the development and expansion of another economy to which the former is subjected. The relation of interdependence between two or more economies, and between these and world trade, assumes the form of dependence when some countries (the dominant ones) can expand and can be self-starting while other countries (the dependent ones) can do this only as reflection of that expansion which can have either a positive or a negative effect on their immediate development (Theotonio,1971).
Thus, dependency  is the relationship between the dependents and the developed countries. It is a situation which conditions the ability of the underdeveloped to develop. It is limited by the expansion of capitalism. Its traditional form was imperialism or colonialism while its contemporary form happens to be Neo-colonialism, i.e., a state of dependency of the underdeveloped periphery (the new states) upon the developed (the former imperialist- colonialists).
Generally, Dependency theory is a sociological theory which holds that economic events in history have encouraged developing countries to depend upon the support of more advanced nations. This dependence prevents developing nations from fully creating institutions and infrastructure necessary for their full transition into industrial nations. This process can take many forms for the developing country.


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