Dependency Theory: Analyzing Underdevelopment in Third-World Countries

Dependency theory emerged as a critique of the modernization theory during the 1960s and 1970s, challenging the notion that development occurs in linear stages. This theory contends that underdevelopment in third-world countries is not solely a result of internal factors but is deeply influenced by external forces. Proponents of dependency theory argue that wealthy nations exploit and perpetuate the economic, political, and social dependency of developing countries. This research essay explores the main claims and concepts of dependency theory and examines its implications for understanding underdevelopment in third-world countries.

I. Challenging Modernization Theory

Dependency theory sought to challenge the modernization theory’s understanding of development as a linear progression through stages. The modernization theory, advocated by scholars like Walter Rostow, posited that societies evolve from a traditional stage to a stage of high consumption through a process of industrialization and economic growth. However, dependency theorists criticized this approach for neglecting the structural impediments faced by developing countries and the role of external influences in perpetuating underdevelopment (Shrum, 2001).

II. External Factors and Underdevelopment

Dependency theory focuses on the external interactions and influences that hinder development in third-world countries. According to proponents such as Samir Amin and Andre Gunder Frank, the economic prosperity of Western nations is intricately tied to the exploitation of peripheral or third-world states. These countries extract resources, control markets, and maintain economic dominance over developing nations, thereby perpetuating their underdevelopment (Velasco, 2002). This extreme variant of dependency theory highlights the exploitative relationship between the wealthy and developing nations.

III. Moderate Variant: Structural Dependence

Scholars like Osvaldo Sunkel, Fernando Henrique Cardoso, and Enzo Faletto proposed a more moderate variant of dependency theory. They emphasize the concept of structural dependence, which acknowledges the interplay of internal and external factors in shaping underdevelopment (Shrum, 2001). Structural dependence posits that the development of third-world countries is hampered by the unequal distribution of power, resources, and wealth between dominant and dependent nations. This variant recognizes the complexities of underdevelopment and the need to address both internal and external factors.

IV. Implications for Third-World Countries

Dependency theory provides a framework to understand the challenges faced by third-world countries in their development efforts. By highlighting the exploitative relationship between dominant and dependent nations, this theory draws attention to the need for structural changes and economic reforms. It calls for developing countries to assert their autonomy, reduce dependency on external actors, and pursue strategies that prioritize their own development goals (Shrum, 2001).


Dependency theory emerged as a critical alternative to the modernization theory by highlighting the significance of external factors in perpetuating underdevelopment in third-world countries. While extreme versions of the theory argue that Western nations prosper at the expense of developing nations, a more moderate variant emphasizes the concept of structural dependence. Dependency theory prompts us to recognize the complex dynamics of underdevelopment and advocates for reforms that promote autonomy and address power imbalances. By understanding and addressing the root causes of underdevelopment, it is possible to foster more equitable and sustainable development pathways for third-world countries.


Shrum, W. (2001). The Social Science Jargon Buster: The Key Terms You Need to Know. Routledge.

Velasco, A. (2002). Dependency Theory and Economic Development in Latin America. International Journal of Political Economy, 32(2), 70-88. doi: 10.1080/08911916.2002.11042896

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