Dependancy Theory - Inequalities in developing world

Dependancy Theory - Inequalities in developing world

1. 1. Frank

   • Developing Countries find it difficult to sustain development due to global capitalism
   • inequality is cased by Global Capitalism - The main problem is Trade
   • External Factors such as Global Capitalism cause inequalities, not internal factors
   • Useful because he looks at external relationships between countries which can disadvantage them. It is the core that keeps the peripheral poor through trade and Global Capitalism and how despite years of trade, theres still not growth and development within the developing countries
   • No discussion of homogenous home grown elites and how individuals within countries exploit and create inequality to stay wealthy. Capitalism within countries ignored

2. 2. Slavery and Colonialism - FRANK

   • Developed countries took resources and encouraged countries to grow particular products
   • Slavery - huge injection of wealth to developed countries helping us to be a developed, industrialised country - which enabled the developed countries to grow at the expense of the developing countries
   • Considers the historical context behind inequality. Direct link between ex colonies and poverty as they've never recovered from the damage we caused them. Modernisation Theory ( Rostov) fails to consider this and how countries don't have wealth because of us and where our wealth comes from
   • GoldThorpe - Colonialism did have positive effects e.g creating infrastructure that the developing countries couldn't modernise without

3. 3. World Trade ( Neo-Colonialism)

   • The Core exploits the peripheral for cheap labour, raw materials and natural resources
   • It is capitalism that causes poverty
   • Core continues to exploit countries, creating inequality when they take advantage of the cheap labour and materials of the peripheral
   • The Peripheral depends solely on changing demands from the Core, however the Core can pick up and drop resources from the Peripherals whenever they want therefore if the tastes of the West changes, the businesses of the Peripheral countries suffer
   • Implies that real substantial development is only possible if you remove Capitalism which is naive

4. 4. TNC's

   • illch - TNC's create false needs which disadvantage and create inequality e.g alcohol and tobacco. The money a country gains buy selling these products they lose in areas such as health care
   • TNC's encourage farming of raw materials which is unsustainable as Western Tastes are always changing
   • Susan George - When TNC's have restrictions in the developed worlds, they often sell to the developing worlds e.g contraceptive depo provea injection. TNC's are also responsible for 3/4 of all World trade and 1/3 of its outputs
   • Simpson and Sinclair - TNC's now dominate the Capitalist World economy and have more power than LEDC's. Not accountable for their actions in Law. TNC's accused of interfering with politics in LEDC's creating inequalities as they cannot escape
   • Helpful as it can explain why developing countries have little power to restrict the dominance of TNC's are they are a lot more powerful and cannot escape it. World Trade Organisation was set up by the richest countries and TNC's to remove trade barriers but they are still exploiting countries
   • Key Tiger Economies have been helped by TNC's and Wolrd Trade and have been able to develop as a result of their trade

5. 5. Debt and Aid

   • Aid leading to dependancy of LEDC's on MEDC's
   • Tied aid only benefits Core economy
   • Hayter - Aid is conditional, the real aim is not to rid countries of poverty but to strengthen capitalism
   • Estimated 11 million die because of the money needed to be paid back in interest by LEDC's To MEDC's and cannot be spent elsewhere
   • Leads to lower life expectancy for the population when they are affected by Aid
   • Explains why countries don't have the economic funds to spend on education and healthcare and create infrastructure to reduce inequality as they have to pay back interest and debts from Aid from the West