Causes of Global Economic Inequality and Theories Explained

⭐ Global economic inequality is a complex issue.

📈 While there has been some global economic convergence, inequality within societies is often increasing.

🌍 During the Cold War, two theories emerged to explain global development: modernization theory and dependency theory.

🌍 World-Systems Theory and Dependency Theory analyze global inequality and the exploitation of poorer economies by richer countries.

💼 Structuralism argues that capitalist structures hinder the development of poorer economies and multinational corporations benefit from reforms.

💰 Dependency Theory claims that resources flow from poor countries to wealthy Western countries in the capitalist system.

🌍 World Systems Theory and Dependency Theory analyze global inequality from a holistic perspective, focusing on the world capitalist system.

⚖️ Both theories argue that the capitalist system creates inequality and poverty, with core countries exploiting workers in both core and periphery countries.

📉📈 While these theories have lost popularity, World Systems Theory is still favored by Marxists, and the failure of communism in various applications has highlighted the economic growth of capitalism in lifting people out of poverty.

🌍 The world is slowly improving despite its problems, suggesting that the issue may lie in how individuals interact with the capitalist system.

🗽 Inclusive political institutions determine the success or failure of nations, encouraging innovation and economic growth.

💰 Wealth creation through business innovation benefits society as a whole, while monopolistic activity leads to poverty and inequality.

🌍 World-Systems Theory, Dependency Theory, and Global Inequality

💰 Wealth concentration in the hands of the few

⚙️ Factors affecting the growth of poor countries

🌍 World-Systems Theory and Dependency Theory explain global inequality.

💼 Transfer pricing allows corporations to exploit and profit from resources in developing countries.

🏛️ Checks and balances within governments are crucial in combating corruption and promoting fairness.

World-Systems Theory and Dependency Theory offer insights into global inequality.

Budget transparency from the bottom can help ensure funding reaches its intended destination.

Practical solutions to global inequality are more likely to come from those solving the issues.