Dependency Theory and Economic Stability in Latin America

Dependency Theory and Economic Stability of the Latin America Name Professor School Course Date The dependency theory explains the uneconomic development of less industrialized countries. Dependency theorists believe that countries that rely on foreign aid, foreign investment, and relying on industrialized industries for trade purposes gain nothing but negative effects (Gitlitz and Landsberger, 2019). Dependency theory theorists say that reliance on developed countries encourages corruption, poor governance, and conflicts. The theory also posits that profits are not reinvested, and only foreigners own exporting businesses. These theorists suggest that developing countries should cut ties with industrialized countries rather than join them. However, the dependency theory faces criticism from the free-market model which denotes th