The Differences Of Modernization Theory And Dependency Theory

This essay attempts to compare and to contrast the theories of Walt Rostow's stages of social and economic development and Wallerstein's world system theory. The Rostow's five-stage model of economic growth and core-periphery concept of Wallerstein’s three-part world system theory are both used to identify a country's development. Although they have similarities, there are differences between the two models. Rostow's five-stage model emphasizes on the development process of countries. On the other hand, Wallerstein's three- part world theory focuses more on the characteristics of the three parts of the world.

The two theories which shall be compared are the modernisation theory and Neo Liberalism. The modernisation theory is a market oriented development theory which states that low income countries can develop economically if they give up their traditional ways which often can be dated back centuries and take on more modern economic principles, technologies and cultural values which comprise of an emphasis on productive investment and savings.

In contrast with modernization theory, dependency theory does not advocate for poorer nations to attempt to assimilate the practices of the wealthy ones. In this regard, dependency theory does not evince the commitment to globalization that characterizes modernization theory; countries are not seen as operating cooperatively and are instead viewed as competing for the same limited pool of resources. Additionally, where modernization theory necessarily involves technology and other principles of modernity (including the ability to interact with others from geographically distant locations), dependency theory does not subscribe to the belief that incorporating technology will lead to economic success (Scott, 1995). At stake in the debate between modernization theory and dependency theory is thus

1. What are the main differences between modernization theory and dependency theory? Does the human development approach represent a radical departure from both?

In many aspects globalization is usually described as a process where due to an increase in trade, technology and cultural exchange the world is getting more interconnected making distances less and less which is giving rise to a capitalist economy. According to (Wallerstein 2004), “world economy has always been capitalist”. It’s like everyone is specialized to perform a certain task and that’s how the idea of division of labour is built within us which ties us to the system of capitalism. Competition and the will to earn more is ingrained which creates state subsidies and makes strong states to use their power to prevent weaker states from succeeding.

According to dependency theory, governance of the global economy has been marked by asymmetry and skewed in favour of developed countries and multinational corporations while developing countries survive “at the margins”. This essay will seek to examine the basis for this point by extracting examples from the real world and comparing the theory with the neoliberal theory in providing a more accurate view of the global economy.

Dependency Theory is a critique, and an alternative to free market economists and modernization theories. It attempts to explain underdevelopment by examining the unequal interactions between core and periphery nations and by arguing that underdeveloped countries must reduce their connections with the metropolis and minimize external pressures in order to achieve a developed status.

Development, in terms of categorizing countries, is the level at which a nation achieves stability, whether that includes stability in the

Modenisation impoverished Africa through colonialism and imperialism by the Western nations and this tendency is with us today as the East nations takes shot to deplete the Africa’s natural resources such as oil and minerals (Matunhu, 2011). As far as Africa would like to outgrow poverty and underdevelopment, this however may be not possible if we still strongly believe in the power and strength of modernity. Combatting Africa’s poverty and underdevelopment includes more than a simple disarticulation of the traditional society (Matunhu, 2011). Given facts that currently China is one of the largest trade partners with Africa, this results that China’s only interest is to exploit Africa’s natural resources ahead of Europe and America. The surplus economic value that is extracted by Chinese capital may be externalized in the form of profit allowance back home and some it could be spent on noticeable consumption (Matunhu, 2011). The theory does not reflect all these factors which drive the economy of a country up to being modernized. Developed countries create modernity through exploitation of the disadvantaged. The core countries exploit the poor periphery countries (Wallerstein,

Modernization theory and dependency theory can be seen as the two most important development theories of the 20th century. Modernization theory of development can be first credited to Walt Rostow. According to Rostow, “ It is possible to identify all societies in their economic dimensions, as lying in one of the five categories: the traditional society, the precondition for takeoff stage, the takeoff stage, the drive to maturity stage, and the age of mass consumption stage. Rostow believed that every country moves from one discrete state to the next. Modernization theory considered that all countries exist along various points of single developmental path. Every country fell along the same developmental spectrum. The modernization theorists maintained that the today’s developed countries have gone through all the stages of development and the developed nations were also underdeveloped at some point in time. All the nations go through the stages of industrialization and capitalism to become developed. The modernization theory runs on the assumption that underdeveloped countries are underdeveloped because they lack the requisite capital, proper institutions and ethos of entrepreneurship and rationality.

Dependency theory is basically a domination theory/ system which makes the develop country get richer, and developing country get poorer, and underdevelopment country remain poverty or maybe worse. As capitalism and globalization take place, the ideas of globalization is about free flows of information, and cultural exchange between nations, and open trade with others country. However, according to dependency theory, which is about the develop country controls the whole market, while developing and underdevelopment countries are rely on develop country.

A process whereby national borders cease to be an obstacle to the movements of products and capitals. (Grant, 1996). One of the good examples of the globalization of production is the product of iPhone cross all over the world. The products' design and software are from America, and iphone's screens are mostly from Japan, its fresh memory from South Korea. Moreover, its assemblage from China. According to dependency theory and world-system theory that the globalization is the development of capitalism divided the world into two parts: one is the developed

Two theories of Globalisation that explain it relatively effectively are Immanuel Wallerstein 's World-Systems theory and John W. Meyer 's World Polity Theory. Contrary to the tendency of classical sociologists to focus on society within the nation-state, World-systems theory portrays nation-states as units within the larger world system. Wallerstein described the “world System” as an international class system based on countries as units instead of individual people. He thought there are three main categories of countries, the core, semi-periphery and periphery. The Core countries have much greater control over the means of production and capital and are thus much wealthier, whilst the periphery counrtries are exploited for their resources and cheap labour. Such a system perpetuates socio-economic inequality, however the system is somewhat dynamic and states can gradually shift between categories. This system allows certain countries to achieve hegemony over the others, in this manner the United States dominated the globe in the 20th Century. World-Polity theory was developed in response to the world systems theory. In this explanation the world has a global culture or “global polity” that greatly influences how nation-states, international organisations and individual people are formed and evolve. The global polity helps define the purpose, identity, behaviour and nature of these social units. The concept of a nation-state itself is only a relatively new concept introduced

Foundation of the dependency theory is Marxism, also it prefigures post- structuralism, and the dependency theory stands for opposite opinion about economical growth and its affect, than neoliberals do. The Dependency theory doesn’t look at economical activities from positive side, especially when it is done by world’s richest countries. Richest countries economical activities always affect poorer countries, especially they cause economical problems. The dependency theory has evolved from two main sources, first is from the United States and other is from Latin America. In the United States the dependency theory developed because of the socialist journal Monthly Review, where neo- Marxist thoughts were summarized and were published a publications about different social organizations. Previously the dependency theory was called as theory of monopoly capitalism, but later it was recalled as we know it now. The thought about the dependency theory rose from observed stagnation in the Third World, where bourgeoisies were acting like they want and did not take into account other opinions. If school of

Although it is right that globalization promotes free trade among the states and unites them, but there are also negative outcomes, which states whether rich or poor try to protect their own interests? These negative outcomes of globalization have made the dependency theory significant in describing the state of affairs in the present world. Poor countries attempt to protect their national markets and become self-reliant (Hewison, 1999). Self-reliance can be seen as supporting a strategy of controlled relations with the world economy. Poor nations should only approve relations on the condition that the relations will enhance the societal and financial well being of the larger population. However, endeavour by the peripheral states to oppose the impact of dependency can result in results in financial sanctions and/or military attack (Sen, 2010). One example of such resentment against globalization is “localism“that surfaced during the financial crisis in Thailand (Hewison, 1999). Localism is an illustration of populist response to the changes and disparities created by globalization. Localism gained substantial energy from the Thai King’s speech in 1997, where he recommended a self-contained economy to counter the negative effects