Just Sociology

Exploring Dependency Theory and World Systems Theory: Key Principles Subtopics and Criticisms

Dependency theory and world systems theory seek to explain the unequal distribution of wealth and power in the global system. These theoretical frameworks offer insightful analyses of the world’s economic and political systems, as well as the power dynamics that shape global relationships.

In order to understand the complexities of dependency theory and world systems theory, this article will explore the key principles, subtopics, and criticisms of both theories.

World Capitalist System

Dependency theory contends that the global system is structured around a world capitalist system, in which there are distinct metropolis and periphery nations. Metropolis nations dominate global economic power, while periphery nations are exploited through their relations with metropolis nations.

Dependency theorists argue that global power is maintained through economic power. Colonialism, Slavery, and Dependency

Colonialism and slavery have had a profound impact on the development of dependency relationships.

For example, empire building often relied on extracting raw materials and establishing plantation monocrops in periphery nations, which had long-lasting economic effects. These practices also created ethnic tensions that have continued to reverberate through society.

An Unequal and Dependent Relationship

Dependency theory posits that periphery nations are caught in an unequal and dependent relationship with metropolis nations. Periphery nations are unable to develop self-sufficient economies when they are beholden to metropolis nations for resources and markets.

Some argue that modern forms of dependency come in the form of neo-colonialism and aid money, which create a cycle of dependence for whole populations.

Strategies for Development

Dependency theory offers a range of strategies for overcoming dependency relationships. Isolation, for example, involves avoiding involvement in the world capitalist system altogether, while associate or dependent development entails forming relationships with metropolis nations without entirely relinquishing control.

Import substitution industrialisation involves developing domestic industries to substitute for imports, and socialist revolution entailing creating a new socialist society.

Criticisms of Dependency Theory

Critics of dependency theory argue that it oversimplifies the complex and dynamic relationships between nations, failing to account for the significant benefits of colonialism, such as the diffusion of technology and infrastructure. Modernisation theory and neoliberalism propose that underdeveloped nations can grow and advance through the adoption of Western economic models.

Bottom billion theory argues that the poorest nations in the world face a unique set of challenges that cannot be explained by dependency theory.

The Emergence of World Systems Theory

World systems theory emerged as a response to the changing global economic and political systems that first crystallised during the 16th century. This theory argues that the global system is grounded in capitalism and structured by imperialist relationships between nations.

World systems theory also highlights the importance of the industrial revolution and mercantilism in shaping global economic structures.

Components of the Global System

The global system is made up of various components. Transnational corporations, international financial institutions, and global trade connect countries and shape the global economy.

Communication technology enables real-time interactions across vast distances. All these components work together to maintain global economic and political systems.

Core-Periphery Relations

World systems theory is grounded in the core-periphery structure that maintains an unequal distribution of wealth and power. The core comprises of global economic powers, while periphery countries are positioned outside of this economic circle.

The core exploits periphery countries through unequal exchange, commodity chains, and uneven development.

Hegemony and the Role of the State

Hegemonic stability theory suggests that global dominance is maintained by the hegemonic power. The state plays a significant role in implementing policies that support specific global economic and political relations.

Nationalism is an important tool employed by the state to maintain control over global economic and political relationships.

Criticisms of World Systems Theory

Critics argue that world systems theory places too much emphasis on the economic system and too little on cultural and social factors. Some argue that national differentiation cannot be accounted for in world systems theory, and that state autonomy plays a significant role in influencing global economic and political relations.

Convergence theory argues that all countries are in the process of convergence towards a common economic model. Conclusion:

In conclusion, both dependency theory and world systems theory offer critical perspectives on the global economic and political system that shape our world.

These theoretical frameworks offer a view of a world that is shaped by exploitation and uneven development, while also highlighting the mechanisms by which this system is maintained. While critics have raised significant challenges to both theories, the insights they provide are still invaluable as we seek to understand the global system in which we live.

The documentary “The New Rulers of The World” directed by John Pilger presents an insightful critique of the global economic and political system. The documentary explores how the World Bank, the International Monetary Fund (IMF), and transnational corporations work to maintain global economic power, often at the expense of underdeveloped countries such as Indonesia.

This expansion will delve deeper into the issues raised in the documentary and explore the impact of globalisation on Indonesia. The documentary highlights how globalisation has contributed to the underdevelopment of countries like Indonesia, primarily by exploiting the natural resources and workforce of these countries.

The focus is on Indonesia, where the Indonesian government was forced to apply for a bailout from the World Bank during the 1997 financial crisis in exchange for the implementation of neoliberal policies. Neoliberal policies included the removal of government subsidies for farmers, leading to the destruction of Indonesia’s small-scale farming industry.

One key issue raised in the documentary is the role of the World Bank and IMF in facilitating the exploitation of Indonesia’s natural resources. The World Bank and IMF had mandated Indonesia to export more natural resources such as timber, oil, and gas to meet the demands of the global market.

However, these export-oriented policies led to the depletion of Indonesia’s natural resources, which has had long-lasting environmental and economic effects. The documentary highlights the role of transnational corporations in furthering the exploitation of Indonesia.

These corporations, such as Freeport-McMoRan, were given favorable deals by the Indonesian government to exploit Indonesia’s significant reserves of copper and gold. These deals allowed Freeport-McMoRan to extract and export natural resources cheaply, resulting in significant profits for the corporation.

However, the Indonesian people and government did not benefit proportionately from the extraction of these resources, given the favorable terms given to the multinational corporation. The situation is a clear example of how neoliberal policies favor transnational corporations over the welfare of small-scale industries and local communities.

Furthermore, the documentary illustrates how globalisation’s impact on Indonesia’s economy has created significant inequality. The impact of neoliberal policies has been felt most acutely by the poor, resulting in the emergence of large-scale poverty in Indonesia.

The documentary highlights the growth of food banks across Indonesia to support a growing number of Indonesians who cannot afford basic necessities. The unequal distribution of wealth created by neoliberal policies underpins Indonesian society’s significant sociopolitical tensions.

The documentary highlights how the global economic and political system is structured to maintain the status quo, benefiting the most powerful actors in the global system. The documentary suggests that neoliberalism’s emphasis on profit maximization and growth has negatively impacted Indonesia’s economy and its people.

Critics of neoliberalism argue that it creates significant inequality and economic instability, ultimately leading to underdevelopment in countries such as Indonesia. In conclusion, the documentary “The New Rulers of The World” provides an insightful critique of the global economic and political system, which has contributed to the underdevelopment of countries such as Indonesia.

The documentary argues that the World Bank, IMF, and transnational corporations work together to maintain global economic power, often at the expense of small-scale industries and local communities. The impacts of globalisation on Indonesia’s economy and society have been significant, generating inequality and poverty.

Hence, understanding the issues raised in the documentary is crucial to exploring the significant challenges present in the global economic and political system. In conclusion, both dependency theory and world systems theory provide valuable insights into the global economic and political system.

These theoretical frameworks reveal how power and wealth are unequally distributed in the world today and offer several strategies for overcoming this systemic inequality. Moreover, the “New Rulers of The World” documentary by John Pilger illustrates how neoliberal policies have contributed to underdevelopment in countries such as Indonesia.

Understanding these complex and dynamic relationships is crucial for addressing the global challenges of poverty, inequality, and instability. FAQs:


What is dependency theory, and how does it explain global inequality? Dependency theory argues that the global system is structured around a world capitalist system that exploits periphery nations for the benefit of metropolis nations, thereby contributing to global inequality.

2. How does world systems theory differ from dependency theory?

World systems theory focuses on the global system as a whole, examining how power dynamics between nations emerge and the influence of the hegemonic power. 3.

What is the significance of the World Bank and IMF in the global economic system? The World Bank and IMF are key players in global economic governance, offering advice and loans to countries in financial crises, but also often implementing neoliberal policies that have long-term consequences for economic justice and equality.

4. What is neoliberalism?

Neoliberalism emphasizes the role of the market in regulating the economy, often at the expense of social welfare programs and opportunities for small-scale industries and local communities. 5.

How does globalisation impact underdeveloped nations? Globalisation can contribute to the underdevelopment of nations through the exploitation of natural resources and workforce, as illustrated in the documentary “New Rulers of The World.”

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