Editing Dependency theory (section)

==Criticism==
Economic policies based on dependency theory have been criticized by [[Free market|free-market]] economists such as [[Peter Thomas Bauer|Peter Bauer]] and [[Martin Wolf]] and others:<ref>See, e.g.:<br/>{{Cite journal | doi=10.1108/CWIS-11-2013-0064 |title = On the structure of the present-day convergence|journal = Campus-Wide Information Systems|volume = 31|issue = 2/3|pages = 139–152|year = 2014|last1 = Korotayev|first1 = Andrey|last2 = Zinkina|first2 = Julia|url=http://cliodynamics.ru/download/Korotayev&Zinkina_Present-day%20convergence_CWIS_31_%202-3_2014.pdf|archive-url = https://web.archive.org/web/20140811115017/http://cliodynamics.ru/download/Korotayev&Zinkina_Present-day%20convergence_CWIS_31_%202-3_2014.pdf|archive-date = 2014-08-11}}</ref>{{failed verification|date=August 2024|reason=Paper does not mention Wolf nor Bauer, nor have any strong relationship to the preceding or succeeding statements}}

*Lack of competition: by subsidizing in-country industries and preventing outside imports, these companies may have less incentive to improve their products, to try to become more efficient in their processes, to please customers, or to research new innovations.<ref>{{cite book|last1=Williams|first1=Michelle|title=The End of the Developmental State?|date=2014|publisher=Routledge|isbn=978-0415854825|pages=44}}</ref>
*Sustainability: industries reliant on government support may not be sustainable for very long, particularly in poorer countries and countries which largely depend on foreign aid from more developed countries.{{Citation needed|date=November 2013}}
*Domestic opportunity costs: subsidies on domestic industries come out of state coffers and therefore represent money not spent in other ways, like development of domestic infrastructure, seed capital or need-based social welfare programs.{{Citation needed|date=June 2015}} At the same time, the higher prices caused by tariffs and restrictions on imports require the people either to forgo these goods altogether or buy them at higher prices, forgoing other goods.{{Citation needed|date=November 2013}}

Market economists cite a number of examples in their arguments against dependency theory. The improvement of [[Economy of India|India's economy]] after it moved from state-controlled business to open trade is one of the most often cited. India's example seems to contradict dependency theorists' claims concerning comparative advantage and mobility, as much as its economic growth originated from movements such as [[outsourcing]] – one of the most mobile forms of capital transfer. In Africa, states that have emphasized import-substitution development, such as [[Zimbabwe]], have typically been among the worst performers, while the continent's most successful non-oil based economies, such as [[Egypt]], [[South Africa]], and [[Tunisia]], have pursued trade-based development.<ref>{{Cite web | url=http://www.mckinsey.com/insights/economic_studies/whats_driving_africas_growth | title=What's driving Africa's growth &#124; McKinsey | access-date=2013-06-19 | archive-date=2013-06-07 | archive-url=https://web.archive.org/web/20130607234929/http://www.mckinsey.com/insights/economic_studies/whats_driving_africas_growth | url-status=dead }}</ref>

According to economic historian Robert C. Allen, dependency theory's claims are "debatable" due to fact that the protectionism that was implemented in Latin America as a solution ended up failing.<ref name=":1">{{Cite web|url=http://www.oupcanada.com/catalog/9780199596652.html|title=Global Economic History: A Very Short Introduction|last=Allen|first=Robert C.|publisher=Oxford University Press|pages=127–129|access-date=2018-02-24}}</ref> The countries incurred too much debt and Latin America went into a recession.<ref name=":1" /> One of the problems was that the Latin American countries simply had too small national markets to be able to efficiently produce complex industrialized goods, such as automobiles.<ref name=":1" />