Dependency theory

Dependency theory explains persistent poverty in less-developed countries as a consequence of their unequal economic relationships with wealthier countries, rather than simply as an early stage of development.

Core–periphery model: A model of the world economy in which powerful core regions dominate less-developed peripheral regions. It maps the unequal global positions that dependency theory uses to explain persistent poverty.
Raúl Prebisch: An Argentine economist who argued that the terms of trade disadvantaged primary-exporting countries. His analysis of trade disparities helped establish the theory's economic foundations.
Modernization theory: A theory that treats economic development as a transition through stages toward industrialized modern society. It sees poverty chiefly as an internal developmental lag, unlike dependency theory's focus on external relations.
New International Economic Order: A 1970s proposal by developing countries to reform global economic rules and reduce international inequalities. It translated demands for a fairer global economic structure into a diplomatic program.
Unequal exchange: International trade in which economic power allows one party to capture disproportionate value. It explains how trade can transfer value from poorer economies to wealthier ones.
Economic Commission for Latin America and the Caribbean: A United Nations regional commission founded in 1948 to study and support Latin American and Caribbean development. Its structuralist research framed the regional economic problems dependency theorists addressed.
Neoliberalism: A political-economic approach favoring markets, private enterprise, and reduced state intervention. Its emphasis on market liberalization conflicts with dependency arguments for changing unequal global structures.
Non-Aligned Movement: An international grouping of states that sought independence from the Cold War blocs. Its members voiced demands for economic sovereignty that resonated with dependency arguments.
Commodity dependence: Reliance on a narrow range of primary commodities for export earnings and economic activity. Dependence on low-value exports can leave countries vulnerable to price shifts and external control.
Andre Gunder Frank: A German-American sociologist and historian who argued that capitalist development produced underdevelopment in the global periphery. His phrase “development of underdevelopment” became a defining claim of dependency theory.

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