This article provides information about the relevance of dependency theories:
Increasing globalisation, which appears an inevitable social condition and process, has pointed out to the interconnected nature of the world today. Never has there been so much flow of capital, finances, goods, people, ideas and so on. Some of these interconnections had been pointed out by the Economic Commission for Latin America and Caribbean (ECLAC) in the 1950s and by dependency theorists later, including the world-system theorists.
“Both theories view the problems of underdevelopment and development within a global context, as interconnected economic, political and social processes. Dependency theory forecast that the world system will tend to concentrate production in the hands of relatively few transnational corporations, making the world an oligopoly market. From this, the theory also forecast a long trend to slow down production and to speed up income polarisation”.
The economic divide and income gap between industrialised countries and developing countries has widened continually. The polarisation between North and South is more pronounced than ever. The United Nations Human Development Report, 1997 shows that the share of world trade for 48 least developed nations, representing 10% of the world’s population, has halved in the past two decades.
There is a widening gap between the rich and the poor as these figures show: The share in the global income of the poorest 20% of the world’s people has fallen from 2.3% in 1960 and 1.4% in 1991 to a current level of 1.1 %, while the ratio of the income of the top 20% to that of the poorest 20% rose from 30:1 in 1960 to 60:1 in 1991, and grew still further to a figure of 78:1 in 1994. In other words, the rich are getting richer while the poor are getting poorer.
These trends show no sign of slowing down, even though the United Nations estimates in the Human Development Report that it will take only 1 % of the global income and around 2-3% of the national income in all but the most impoverished countries to fund a programme to eliminate world poverty. These figures call attention to the fact that these growing disparities between people and nations have to be accounted for and analysed.
Since the aim of uneven development, dependency theories or world-system theory has been to account for the international political economy which is an interconnected world, there is reason to examine these theories for their rationale, though on the face of it they do not seem to be reflecting contemporary circumstances and situations and some of their formulations have been questioned. However, in the face of growing interconnected economies and political economy, it is worthwhile to critically evaluate the theories.