The dependency theory of development suggests that there is a flow of resources from low income or underdeveloped countries called periphery countries to richer “core” countries

The dependency theory of development suggests that there is a flow of resources from low income or underdeveloped countries called periphery countries to richer “core” countries. The theory was born in the 1950s as a response to criticism of the Modernization theory and became widely acknowledged in the 1960s and 1970s. It denied the idea that underdeveloped countries can progress through stages exactly like developed countries did in the past suggesting that the lack of development in underdeveloped states cannot be blamed on the failure of internal institutions such as corruption and wealth inequality but is a result of exploitation from wealthier nations. The standard notions of the theory are that core countries obtain natural resources from periphery countries which are inherently dependent on these wealthier nations for more higher values finished goods. This enables the wealthy nations to hold their advantageous position economically as dependent nations struggle to overcome their influences. Therefore, poverty is not necessarily because nations are excluded from the global economic system but due to how they are integrated within it and the dysfunctional dynamics between them. Theorists of this model argue that development is not just the product of widespread capitalism but can arise through implementing appropriate economic policies.