Industrialization and the global economy created long-lasting structural relationships, and dependency theory explains how these relationships generate persistent inequality between wealthier and poorer states.

Dependency Theory: Foundations and Purpose

Dependency theory is a major framework in human geography that examines why economic disparities persist between regions despite decades of globalization and development initiatives.

This diagram illustrates the basic logic of dependency theory, showing how economic relationships link wealthier core economies and poorer peripheral economies. It emphasizes that flows of resources, goods, and profits are structured in ways that favor the core. The image includes more detail than required by the syllabus, but all elements support the central idea that unequal economic relationships keep poorer regions dependent on wealthy cores. Source.

Emerging in the mid-20th century, it challenged earlier modernization approaches by arguing that underdevelopment is actively produced, not simply the result of internal shortcomings. The theory’s central idea is that the global economy is structured to benefit core countries while limiting opportunities for periphery countries, creating a cycle of dependence.

Introducing Key Terms

The term underdevelopment is central to this topic, and within dependency theory, it refers to structural conditions created by external forces rather than a natural or original state.

Dependency theory uses this concept to argue that historical and contemporary ties to wealthier states shape how poorer states develop—or fail to develop—over time.

Economic geographers emphasize that the theory focuses on patterns at multiple scales, from global trade networks to the internal economies of dependent states. These patterns help explain why many countries rich in natural resources still struggle to achieve broad-based economic growth.

Core Concepts and Structures of Dependency

Dependency theory builds on the idea that the world economy functions through relationships of dominance and subordination, often mirroring colonial histories. Wealth flows from poorer regions to richer ones through unequal arrangements that limit local industrialization and capacity building.

The Core–Periphery Relationship

The theory’s central structure is the persistent divide between core and periphery regions, with the semiperiphery acting as an intermediate buffer.

This diagram depicts a core–semiperiphery–periphery structure, highlighting how wealth and power are concentrated in the core while the periphery remains economically dependent. The semiperiphery occupies an intermediate position, linking and mediating between core and periphery. The graphic comes from world-systems theory, which is broader than dependency theory, but it clearly illustrates the hierarchical pattern emphasized in the syllabus. Source.

• Core states

  • Possess diversified, advanced industries

  • Maintain technological advantages

  • Exercise political, financial, and cultural influence

  • Extract profits from global economic relationships

• Periphery states

  • Rely on exporting raw materials or low-value goods

  • Have limited industrial development

  • Depend on external financing and technology

  • Experience capital outflows that prevent local accumulation

• Semiperiphery states

  • Exhibit mixed characteristics

  • Function as stabilizers in the global system

  • May exploit the periphery while being subordinate to the core

This global hierarchy supports the reproduction of unequal development patterns, with core regions capturing the most profitable economic activities.

Mechanisms that Produce Dependence

Dependency theory identifies several interconnected processes that maintain inequality across places. These mechanisms reinforce each other and shape long-term development trajectories.

Unequal Trade Relationships

Periphery states often export cheap raw materials and import expensive manufactured goods from core states. This pattern can prevent local industries from becoming competitive.

• Low-value exports limit government revenue

• High-value imports drain foreign currency reserves

• Market volatility exposes producers to unstable global prices

Foreign Ownership and Control

Many industries in periphery countries are owned by foreign corporations, especially in mining, agriculture, and manufacturing. Because profits often leave the country, local reinvestment is limited.

This process reduces long-term opportunities for local development and increases dependence on external investors.

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Debt and Structural Constraints

International lending can deepen dependency when repayment obligations exceed a country’s ability to invest in public services or development.

• High interest payments reduce domestic spending

• Loan conditions may require policy changes that favor external investors

• Long-term debt cycles limit economic sovereignty

Commodity Dependence Connections

Periphery economies often rely heavily on a narrow set of export commodities. This increases vulnerability to global price shifts and prevents diversification, reinforcing dependency theory’s arguments. While commodity dependence is a separate subsubtopic, dependency theory treats such specialization as a symptom of unequal global structures.

Spatial Consequences of Dependency

Dependency relationships produce clear spatial patterns that shape how regions develop economically and socially.

This world map classifies countries into core, semi-periphery, and periphery based on trade and development characteristics. Darker or more prominent areas represent core states with concentrated economic power, while lighter regions show semi-peripheral and peripheral states that experience more vulnerability. The exact country assignments and time period reflect one scholarly interpretation and contain more geographic detail than required by the syllabus. Source.

Concentration of Economic Activity

Core-controlled industries tend to cluster in areas that provide access to transportation networks or foreign-controlled extraction zones. This creates uneven development within countries.

• Coastal port cities often become enclaves of foreign investment

• Interior regions may remain underdeveloped

• Local labor benefits only minimally from industrial presence

Limited Industrialization

Because core states dominate advanced manufacturing, periphery states struggle to move into higher-value sectors. Technology transfer is restricted, and local industries may be outcompeted by imports.

Social and Political Implications

Dependency relationships can shape governance structures and social conditions.

• Governments may prioritize foreign investors over local needs

• Income inequality can widen as elites benefit from external ties

• Social services may suffer due to limited public revenue

These outcomes reinforce the cycle of dependency, making it difficult for countries to pursue alternative development paths.

Critiques and Continued Relevance

While influential, dependency theory is not without critiques. Some argue that it underestimates internal factors or the potential for countries to change positions within the global hierarchy. Others note that successful industrializers such as South Korea challenge the theory’s rigidity. Still, dependency theory remains a key tool for understanding contemporary trade relationships, global supply chains, and persistent development gaps.

The theory provides AP Human Geography students with a framework for analyzing why unequal global structures endure and how economic patterns reflect historical and spatial power relations.