Given the fact that Third World countries are underdeveloped (or developing); the causes that led to their underdevelopment are controversial. According to dependency theorists; capital accumulation in the Core had led to the underdevelopment

Even certain members in the developing countries such as entrepreneurs; merchants; military rulers and others who are engaged in trade or power help in a way or another in increasing their nations’ recession.4 Being dependant on international corporations and institutions, such as multinational corporations (MNCs) and the International Monetary Fund ( IMF) ; and receiving profits from such structures; serves the interests of wealthy countries that have such international structures tied to them by “ allegiance funding”.5 Thus the elites are serving their personal interests and are benefiting wealthier foreign countries by accumulating capital there, at the expense of increasing the underdevelopment of their own countries. This occurs through the presence of the Northern Hemisphere extending comprador groups in the less developed countries. Such comprador groups are the powerful elites who serve and work for the foreign investors. 6 Thus external dominance plays an important role in this stream of thought; and even if third world countries are required to prove their education and productivity as the linear stages and structural- change theories claim, they will still face underdevelopment as a result of “  direct and indirect economic control of their First world and domestic opressors.”7 

A second stream of thought of the international dependence theory is the false paradigm model. This model places the underdevelopment of third world countries as a result of faulty and misleading meaningful advice of developed countries to LDCs. In fact the advices given actually serve the interests of the Core regardless of whether it would benefit LDCs or not. 8  Such advice would be provided from “ uninformed, biased, ethnocentric international “ expert” advisors from developed country assistance agencies and multinational donor organizations.” 9 These experts offer faulty sophisticated economic theories and models that LDC members use and result in high inequality in land and property ownership; as well as the lack of proportion in the control of local elites over domestic and foreign financial assets. 10 Even intellectuals would face the problem of lacking the valid knowledge of appropriate economic policies that serve their countries’ financial and economic interests. Thus what is discussed on academic levels is not what takes place in the government discussions of trials to maximize GNP rates and thus new insights for development are not provided. 11 For an example Egypt is a third world country that has taken the privatization policy off the U.S. in an attempt to increase productivity. However what actually happened was that the Egyptian government applied privatization to existing industries without bearing in its calculations that it has  different economic situations than the U.S., and hence this misled advise of the application of privatization did not lead to productivity as in the U.S.

The third approach of the dependency theory is the dualistic-development thesis which implies the "existence and persistence of increasing divergences between rich and poor nations" on different levels. This concept involves four elements : first the situation  where there are those who are superior ; those who are inferior who "can coexist in a given space". Such involve the "coexistence of modern and traditional methods of production in urban and rural sectors" as well as the presence of rich highly educated elite members of society with "masses of illiterate poor people". The second point implies the tendency of the former coexistence between superior and inferior structures to stay for long and not to change. This is proved by the rising international inequalities. As for the third element it notes that the coexistence of superiority and inferiority are even liable to increase and as stated by Todaro , the productivity gap between workers in developed countries and their counterparts in most LDCs seem to widen with each passing year.” 12 

The third element states that the superior elements are affecting the inferior elements negatively; in which they are not pulling them up but instead are increasing their underdevelopment by trickling down to them or pushing them down more. 13 Even if this trickling down is because of the political hegemony of the inferiors’ governments causing the people to not trust their countries and thus do not invest there, it is still affected more.

An example of a 3rd world country with conditions fitting the dependency theory. According to Michael P. Todaro ,  Argentina "had a negative growth rate throughout the 1965 – 1990 period ; and in the 1980s ; Domestic investment shrunk at a 8.39% rate" 14. Thus after achieving developments till the 1960s and after being one of the top with per capita income in 1870 ; Argentina failed Rostow’s linear stages approach ; and after being developed and experiencing the take off stage with high manufacturing rate , it under developed heavily till today (2000) being "not even in the top50" countries with per capita income rates 15. As for the dependency theory , Argentina was affected by U.S. and Britain interests in a way that affected its development negatively. The country relied heavily on the export of primary goods , whose real prices fell when compared to the imported materials and being unable to manufacture its own export industries relying on MNCS and hence having to abide by their rigid adjustments. Thus Argentina was selling national industries to foreign investors. All this proves the first and 3rd elements that I discussed earlier concerning the dependency theory thoughts of the neocolonial dependence model and the dualistic approach ; where superior wealthier countries like the U.S. and Britain are affecting inferiors like Argentina in terms of economics and finance. As the inferior try to expand they get tied more by economic restrictions that mainly serve the interests of the superior (Core). Even if Argentina fits the                  neoclassical counter revolution theories of  having its economy hindered by rigid governments intervention policies of supporting interests of some individuals and not the inferior countries’ development such as is the  "bias against production of  exports" by the government of Argentina. As the economy became more liberal development was better ; but this development does not deny the dependence and effect on Argentina by foreign wealthy countries. 16 

Another example of a Third World country that proved improvement in terms of development is Cuba. However this development is facing a repression currently, and both changes are being affected by foreign implications.  Nevertheless, managing to provide “ adequate fundemental resources for successful human functioning on an egalitarian basis” makes the country still considered as “ unique in combining high level of development of its human capoital with a generally low level of development of the rest of its political economy”17. However it is mentioned By Todaro that Cuba opened greatly for foreign investment especially from Mexico, Canada and Europe. Being able as well to have a “ healthy,well educated labor”, Cuba proved a unique situation as a Third World state, despite the U.S. heavy opposition to invest in it. However the U.S, did contribute to the development of Cuba in terms of affecting Cuban policy for the first two centuries of Cuban development.  Fascilitated emigration of Cubans to the U.S. till 1994 explained the effect that Cuba had from the U.S.18 Despite the fact that most of the Cuban economy remains in native hands, this does not deny the fact that as the dependency theory claims,  that even in development an inferior is tied by the intervention and control of the superior.19

A final example that I would like to mention is Japan after the Second World War. According to The Twentieth Century World : An International History by William R. Keylor. Despite the fact that the miraculous economic rise of Japan after being destroyed completely by the U.S. after the Second World War ; is a mystery itself bearing that Japan does not benefit noticeable kinds of natural resources and was attacked heavily by the nuclear bomb. According to the book; Japanese exports that were almost “negligible in 1949, had  risen to 3:2 % of total word exports in 1961 and 10 % of the total by 1986” becoming the “premier banker of  the word” in the 1980s after the heavy tax reduction in the U.S. accompanied by increased defense financing thus leading the U.S to become a heavy debtor after being the leading creditor in WWI. As stated in the book,  Japan managed to have such high expansion in export trade through 2 main steps. The first was its almost free access to foreign markets that was made easier by the GATT “periodic tariff reduction negotiations.” Succeeding in underselling its foreign competitors at the production costs, the U.S. become Japan’s main foreign customer.20 The second step was that Japan used inexpensive new materials energy thus its commodities were cheaper than finished manufactured products generating  more profits in the foreign market .21  The U.S. also aided Japan with $ 2 billion U.S. Thus even wise policies and the hard working force of the Japanese needed foreign aid especially from the U.S.  to maintain the development of this developed nation.

In conclusion, despite the claim of alternative theories that LDCs are responsible for their backwardness, either because of rigidity of their governments’ economic and political olicies, or lack of liberation in srengthening international trade and foreign investment, the capital accumulation in the Core affects their recession. This is because as shown in the former examples, development of an inferior state cannot happen without aid from wealthy countries, and in order to maintain any reached development, wealthy countries are still needed even if with rigid ties to maintain trade exchange and profit.    

End Notes

1. (Michael P. Todaro, 91 ,2000)
2. (Michael P. Todaro, 91 ,2000)
3. (Michael P. Todaro, 91 ,2000)
4. (Michael P. Todaro, 91 ,2000)
5. (Michael P. Todaro, 91 ,2000)
6. (Michael P. Todaro, 91 ,2000)
7. (Michael P. Todaro, 91,2000)
8. (Michael P. Todaro, 92 ,2000)
9. (Michael P. Todaro, 92 ,2000)
10. (Michael P. Todaro, 93 ,2000)
11. (Michael P. Todaro, 93 ,2000)
12. (Michael P. Todaro, 94 ,2000)
13. (Michael P. Todaro, 94 ,2000)
14. (Michael P. Todaro, 144 ,2000)
15. (Michael P. Todaro, 144 ,2000)
16. (Michael P. Todaro, 145 ,2000)
17. (Michael P. Todaro, 107 ,2000)
18. (Michael P. Todaro, 108 ,2000)
19. (Michael P. Todaro, 108 ,2000)
20. ( William R. Keylor,430,2001)
21. ( William R. Keylor,431,2001)

Works Cited

Keylor, William R. The Twentieth Century World. 4th ed. New York: Oxford  

      University Press, 2001.

Todaro, Michael P. Economic Development. 7th ed. England: Addison Wesley  

      Longman, Inc, 2000.