What are the assumptions of dependency theory?
The assumptions of dependency theory:
Dependency theory extends Marx is theory of surplus value to international relationships. For Marx, labour is the simply source of economic value. The capitalist pays his employees less than the value their labour has added to the good, maintenance the surplus into the form profit and interest.
This is equally true that DCs exploit LDCs (less developed countries) by extracting their surplus value. Each surplus value becomes the dissimilarity among the values of what an LDC produces and what this paid to produce that by a DC.
Free transnational and trade foreign direct investment distorts the whole economics and social structure of Less Developed Countries (LDCs) that become geared to meeting the requirements of DCs for example: export and orientated industries.