Dependency Theory in Economic Development

As it happened, political freedom did not translate into the economic transformation that had been predicted for the former colonies. While the apologists for capitalism were stumped, however, so too were the defenders of Marxist economics (Palma, 1978, pp. 881-924). Attempted explanations offered within the contexts of the then well accepted diffusion and structuralist models were simply ineffective.

The diffusion model holds that progress is a function of the spread of modernism to backward, archaic, and traditional economies, and that the principal factors leading to development are advanced technology and an infusion of foreign capital (Wallerstein, 1979, p. 24). In this model, development is equated with industrialization and increased economic diversification. The diffusion model views develop

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ices or if they fall more slowly than import prices. A secular decline is a long-term downward trend. Developing countries typically find themselves in situations wherein they export primary products, while they import secondary, or processed, products. Primary products are, in effect, raw, or unprocessed, goods. Thus, a secular decline in the terms of trade for developing countries reflects a change in the export/import price index ratio for these countries, wherein export prices are constricting in a relative sense, while import prices, again in a relative sense, are expanding. A secular decline in terms of trade is devastating for the capital generation process that is crucial to development. During the Colonial Period, terms of trade had been manipulated in favor of the occupying countries, and the terms of trade for developing countries in the post Second World War period were, it was contended, a legacy of the Colonial Period (Spraos, 1983, p. 1). A fourth approach to dependency was proposed by Cardoso and Faletto (1967, pp. 24-51) as an analysis of the concrete processes of development. This approach eventually came to be known as the associated-dependent development model. In this model, as is true of other approac
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Some common words found in the essay are:
World War, Cardoso Faletto, Trinidad Tobago, Dooley Matheisen, Wolf Hansen, Colonial Period, Cardoso Fernando, peripheral economies, Paul Palma, South Press, developing countries, Gudeman Stephen, terms trade, 1978 pp, palma 1978, palma 1978 pp, import prices, wallerstein 1979, multinational corporation, industry peripheral economies, dynamic industry, export prices, 1978 pp 891-924, ed boston south, rev ed boston,
Approximate Word count = 1613
Approximate Pages = 6 (250 words per page)

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