f economic development attributes underdevelopment to structural deficiencies in a country's economy (Gudeman, 1978, pp. 121-141). These structural deficiencies are most often defined in the contexts of the need for land reform, problems associated with single crop or single resource economies, and problems associated with an excessive concentration of wealth and income within a country.
In the wake of the explanatory failure of the existing models, dependency theory evolved (Palma, 1978, pp. 881-924). Dependency theory relies on an analysis of peripheral development within an international capitalist economic order (Wallerstein, 1979, pp. 101-154). The general dependency model holds that underdeveloped countries are controlled economically by developed countries. The general model further holds that (1) underdevelopment is not an original state, (2) contemporary underdevelopment resulted from the economic imperialism of developed countries, (3) the economic surplus in developing countries is drained to developed countries, and (4) multinational business activity is the means of perpetuating dependency.
Adherents of dependency theory, however, could not agree among themselves as to exactly how dependency inhibited economic development (Palma, 1978, pp. 881-924). Four approaches to the application of dependency analysis were developed. One approach held that dependency was an outcome of inhibited capitalist development in the peripheral countries. This conception of dependency was a sort of neo Marxist explanation of why the predicted bourgeois democratic revolutions had not occurred in newly politically independent countries. A second approach conceived of dependency as the development of underdevelopment (Wallerstein, 1979, pp. 101-154). In this approach, developed economies were perceived as core countries, while underdeveloped economies were classified as peripheral countries. Through constricting economic ties, the...