Dependency is associated with the economic development of a nation in terms of political, economic, and cultural influences on its policies. The point of dependency theory is to address mechanisms of national underdevelopment in many cases by examining the patterns of interactions between dominant and inferior states and call to attention that the inequality among nations is at the core of those interactions (Dos Santos). Although there are varied dependency theories for regions and nations all over the world, Latin America serves as a model for dependency theory in multiple 20th century economic studies (Ferraro).
The recurring theme of extraction of goods from a periphery, that is, Latin America to an industrialized core began with European colonization even though the US has now taken on a majority of that role. This position was secured through the migration of US corporations to Latin American countries where both the labor and the resources were cheap. Though it is true that they provided jobs for the masses, they did so at the expense of their workers. Latin America, without any refinement infrastructure to produce finished goods, continues to export mass amounts of raw materials and ship them off to developed nations (Bodenheimer). Eventually through trade, Latin America buys the goods made by the developed countries at a higher amount than their profit from selling the raw materials. This mechanism between core and periphery increases their disparity, thus preventing Latin America from establishing an equal