Modernization Theory
Modernization theory is used to understand social and economic development of societies. Coming into prominence in 1950’s and 1960’s, it was partially conceived to discuss development of third-world countries and those not at the forefront of the western world. This theory poses that each nation becomes more complex, sophisticated and “developed” with the increase in its level of modernization. In this vein, the shift towards the adoption of more technologically advanced systems, complex social relations and economic structures is seen as development. Furthermore, it is asserted that more developed nations have the capacity to promote the growth of their lesser counterparts, by using their own resources, political power or reach to promote certain developmental goals.
Dependency Theory
Dependency theory is also used to discuss the position of poor countries in the world economy, as well as their relationship to other nations in the world. Contrary to the positions of the modernization theory, proponents argue that the adjacent position of third world countries is precisely the reason why they find themselves in a disadvantageous position compared to others. The process of selling their natural resources and labor for cheap lends poorer nations to exploitation by the more influential ones, and denies their natural growth. Furthermore, to participate in the economy, the poor nations then buy their own processed goods at a higher price, instead of developing their own processing capabilities. The interaction of buying and selling forms a permanent dependency, where both participants are unable to change the nature of their relationship.
Which Makes More Sense
Personally, I think that the second theory is more coherent and realistic to the trends that can be seen today. Modernization, and actions from the outside, rarely led to comprehensive change or development around the world. Despite a large number of poor countries being “helped” by far richer nations, their overall status in the economy does not change. The third world nations are exploited for resources and then pushed into needed directions by those seeking to profit from it.