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What is dependency theory?
Dependency Theory:
Dependency theory uses economic and political theory to describe how the procedure of international trade and domestic development makes several LDCs (Less Developed Countries) ever more economically dependent onto DCs.
Dependency theory notices underdevelopment as the result of unequal power relationships among rich developed capitalist countries and also poor developing ones. Well-Powerful developed countries dominate dependent powerless LDCs (Less Developed Countries) through the capitalist system.
There are two agents, A and B. Both have preferences represented by a von Neumann-Morgenstern utility function u(c s j ) = ln (c s j ), where c s j is consumption of agent j in
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Importance of production.
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