Learning Activity 6

Dependency theory

The dependency theory is based on the Marxist view of the world. They focus on the cause and consequences of underdevelopment. How the rich countries exploit the poor for their benefit. It is seen as a product of colonialism that the rich countries are where they are. According to the theory, all modern economics are united into a single capitalist with economic structure.

Modernization theory

The modernization theory states that poor countries are poor because they are yet to develop into modern economics and their failure to do so is big because of the internal factors such as the resistance to the free market. All countries begin at the traditional underdevelopment level. Poor countries must let go of their cultural values in order to grow.