Dependency Theory In Latin America

In Latin America, the rise of wealth in the first world and backwash the development in the third world caused the unachievable with the “Trickle Down” of the third world (McKay, 2016). The reconstruction in the European countries were subsidized by the external assistant rather than their internal improvement (Richard, 2015) which call “Dependency Theory”. Dependency theory was designed to respond the modernization theory (Reyes 2001a). This theory focuses on the development of the third world which refers to the underdevelopment countries. The definition of Dependency is the oppositional ideas of classical system that construct the shape of world economy which the country was accepted the harm of other countries in exchange for oversea assistance.
He cited that the growth of wealth in the core states did not accelerated the development in the non-industrialized nations. Raul believed that the backwash in the third world triggered by activities in the north. The failure of the development in South America forced the essential of the theory of dependency (Mckay, 2016). Inequalities between the core and the peripheries are considered as the force that inspired dependency theory. As cited by Ferraro (Vincent Ferraro, 2008) This means the benefit of the rich countries outweigh the poor nations. The underdeveloped nations received income from the export, however they could not afford the import from the core countries. The reason be hide this issue is the developed countries can control the market. Thus, this perspective leads dependency theory to values “Equality”. Amin (1976, 1977) stated that the cores and peripheries are imbalance or unequal because most technologies were imported, to the underdeveloped countries, with higher price which contradicted with the price that exported to the rich countries. Due to this disparity of both nations, Raul Prebisch (1950) stated the economic and trade policy must be reformed hence the underdeveloped countries could possibly shrink the import of industrial products from the core countries. Thus, these products could be manufactured by the
This means the change of policies in the peripheral countries to quiet similarity to the core countries, in order to see the achievement, similar in the west (Mckay, 2016). As stated by Rostow (p 56, Mckay, 2016) the stages of Economic Growth (1960) could possibly be implemented by the underdeveloped countries. Despite, the growth could not be achieved automatically due to the internal problems such as the economic and political policies might not fit the theory, in the poor countries (Mckay, 2016). The rich countries see modernization as equality, in term of global commerce, between the producers and buyers though the poor countries were treated unfairly amongst the export of low price goods and the imports of expensive product from the core countries. On the other hand, dependency theory shows the precise explanation of inequality which occurred between the core countries and the peripheral countries (Raul Prebisch, cited in Vincent Ferraro, 2018, p58). The elaboration of this reason is the rich countries are taking advantage of the poor countries. Nevertheless, the unclear of dependency theory is the explanation of the definition and the way to achieve dependency. In dependency theory, the theory does not provide any solutions for underdeveloped countries to become