Modernization Theory
Modernization theory was developed during the neo-liberalism era based on structural functionalism. The theory draws its inspiration from the Keynesian economics that argued that development in its own right is an ideal (Preston, 1996, p.15).
Liberalization of Markets
In the start of 1980, a new era of market functionalism was started with the liberalization of markets being common characteristics.
Assumption of Industrialization
Modernization theory makes the assumption that all the underdeveloped countries will remain that way unless they become industrialized. In modernization industrialized countries are viewed as functional economies that can evolve through the economic changes. In particular, modernization emphasizes the need for investors and entrepreneurs for countries to make progress (Rice, 2012, p.16).
Dependency Theory
In contrast to modernization, dependency theory encourages historical materialism through criticizing the whole idea of political economies. The argument of the dependency theory is founded on a global capitalistic system which argued that underdeveloped nations will only develop through forming dependencies on their former colonial masters.
Development through Positive Relationships
From the ideologies of the theories, it is evident that modernization describes that development can be achieved if developing countries follow the footsteps of the western industrialized countries while dependency theory relies on the historical conditions as the basis of structuring the economies of developing countries. Dependency theory is discriminatory since it favors the development of developed nations to the detriment of developing nations (Pieterse, 2009, p.23). Dependency theory looks at developing nations as subordinated to the developed countries. As such dependency theory looks at the development of many nations in the world in relation to the patterns and interactions between nations. The theory concludes that development can only be achieved through positive relationships between those nations.
Stages of Modernization Theory
Modernization theory argues that for a country to develop it has to pass through five critical stages fully.
Stage 1: Primitive Society
The theorists argue that for countries to develop that have to first start from being a primitive society that in most cases are characterized by subsistence form of agriculture (Hodder, 2014, p.6).
Stage 2: Preparation
Then when ready the society will move into the second stage which is preparation stage, and at this stage specialization takes place, and market-oriented production starts, also the country develop relevant infrastructure that will support trade.
Stage 3: Takeoff
The third stage is called the takeoff stages in which the country starts with urbanization and industrialization process, and the economy moves from agriculture to manufacturing (Hodder, 2014, p.19).
Stage 4: Drive for Maturity
The fourth stage commonly referred to as the drive for maturity is characterized by a reduction in imports that supports the last stage of modernization called mass production in which the industries produce more surpluses for export. The assumption in modernization theory is that undeveloped nations will remain so because they are not industrialized.
Interdependency in Dependency Theory
On the other hand, dependency development theory assumes that development is not achieved through stages, but rather it is a form of interdependency between the dominant economies with the less dominant economies. As argued, due to the differential status between the two states developing and developed nations are not equal in terms of their achievements (Rice, 2012, p.online).
Core, Semi-Periphery, and Periphery
The view of dependency theory is politically conservatives in that they argue that underdeveloped nations are that way because of the overexploitation by the developed counterparts. The theory identifies development in three regions first there is the core which constitutes of the developed nations, the second region is the semi-periphery which is transitional economies, and finally, there are the periphery countries which are underdeveloped (Preston, 1996, p.10). The relationship between the countries at the core and the countries at the periphery are based on industrial production, and this means there is a flow of products from the core to the periphery. However, the countries at the core benefit more because they supply the countries at the semi-periphery and periphery with goods and services. However, dependency theory assumes that the relationship is not static and countries can move from the semi-periphery to the core.
Similarities between Modernization and Dependency Theories
Despite the differences between the theories, there are some core similarities between the theories given the fact that economies are progressive and evolutionary by nature and this means that development is accessible to both developed and underdeveloped countries (Rice, 2012, p.online). According to the theories, the path to development is linear in some aspects, and both developed and underdeveloped countries can follow the path to development. In addition, the two theories are similar in terms of their statement of the relationships between developed and developing worlds based on the changing social and economic trends that have been observed in the world.
References
Hodder, A., 2014. The companion to development Studies. Third Edition ed. New York: Routledge.
Pieterse, J., 2009. Development theory. London: Sage.
Preston, P., 1996. Development theory: an introduction. Cambridge: Blackwell.
Rice, M., 2012. Compare and contrast modernization theory and dependency theory. [Online] (online) Available at: http://mjrice.tumblr.com/post/36585970003/compare-and-contrast-modernisation-theory-and [Accessed 11 May 2017].
