![]() Global Economic Institutions form what Wallerstein calls a Modern World System, and all countries, rich and poor alike are caught up in it. Global Corporations, and global capital, transcend national boundaries, and nation-states (even wealthy ones) are relatively powerless to control them, thus in order to understand why countries are rich or poor, we should be looking at global economic institutions and corporations rather than countries. However focusing on countries (or governments/ nation-states) is the wrong level of analysis government today has declined in power, whereas Corporations are more powerful than ever. Dependency Theory tended to argue that countries are poor because they used to be exploited by other countries. One must look at the world system as a whole, rather than just at individual countries.Wallerstein’s theory has four underlying principles However, he also believes that the global capitalist system still requires some countries, or at least regions within countries to be poor so they can be exploited by the wealthy at the top. Wallerstein accepts the fact ex-colonies are not doomed to be forever trapped in a state of dependency it is possible for them to climb the economic ladder of development, as many of them have done. World Systems Theory was developed by Immanuel Wallerstein (1979). World-systems theory is a response to the criticisms of Dependency Theory (and for the purposes of the exam can still be treated as part of Dependency Theory). There is a very high level of social inequality, together with a relatively weak government that is unable to control the country’s economic activity and the extensive influence of the core nations. One of the main reasons for their peripheral status is the high percentage of uneducated people who can mainly provide cheap unskilled labor to the core nations. These are the nations that are the least economically developed. However, they strive to get into a dominant position of the core nation, and it was proved historically that it is possible to gain major influence in the world and become a core country. ![]() In terms of their influence on the world economies, they end up midway between the core and periphery countries. These regions have a less developed economy and are not dominant in international trade. Due to resources that are available to them (mainly intellectual), they are able to be at the forefront of technological progress and have a significant influence on less developed non-core nations. They are able to deal with bureaucracies effectively they have powerful militaries and can boast with strong economies. This constantly reinforces the dominance of the core countries.Ĭore nations appear to be powerful, wealthy and highly independent of outside control. Core countries focus on higher skill, capital-intensive production, and the rest of the world focuses on low-skill, labor-intensive production, and extraction of raw materials. ![]() World-system refers to the inter-regional and transnational division of labor, which divides the world into core countries, semi-periphery countries, and the periphery countries. World systems theory is a multidisciplinary, macro-scale approach to world history and social change that emphasizes the world-system (and not nation-states) as the primary (but not exclusive) unit of social analysis.
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