How did dependency theory explain Latin America's relationship with the United States and western Europe?

Dependency theory emerged in the 1960s as a critique of modernization theory, arguing that Latin America’s underdevelopment was not a natural stage of growth but a structural consequence of its position in the global economy.12

The theory explains the relationship between Latin America (the "periphery") and the United States and Western Europe (the "core") through the following dynamics:

• Unequal Exchange: The international division of labor, established during the colonial era, forced Latin American nations to specialize in exporting raw materials and cheap labor to the core. These nations then purchased finished manufactured goods from the core at higher prices, creating a cycle that depleted their capital and hindered industrialization.12
• Structural Dominance: Dependency theorists argued that market forces and imperialism perpetuated this imbalance. Even after formal independence, the economic structures remained oriented toward serving the core, reinforcing a relationship of exploitation.2
• Internal Complicity: The theory emphasized that powerful domestic groups within Latin American countries often shared economic interests with the core, further sustaining these unequal relationships.1

While some proponents initially advocated for import substitution industrialization to break this cycle, many eventually concluded that such strategies under capitalist relations remained susceptible to continued domination by core economic powers.12