Dependency theory posits that the global economic system is divided into core and peripheral nations. Peripheral nations typically export raw materials and minerals to the core, while core nations export high-value manufactured goods back to the periphery. This creates an unequal exchange relationship where the periphery remains economically dependent on the core for industrial products and technology, reinforcing their subordinate position in the global market.

Paul Baran, a key figure in dependency theory, argued that the global economic system was structured to benefit developed nations at the expense of developing ones. He posited that the expansion of Western capitalism into the periphery resulted in the systematic extraction of resources and the underdevelopment of those regions, creating a relationship defined by exploitation.

World-systems theory and dependency theory are the two primary Marxist-derived frameworks in international relations. Both theories analyze global inequality by focusing on the economic exploitation of the 'periphery' by the 'core' nations. They challenge mainstream realist and liberal perspectives by emphasizing the role of global capitalism and historical economic structures in shaping international political outcomes.

Radical structuralists, often associated with dependency theory, argue that the global capitalist system is structured in a way that benefits core developed nations at the expense of peripheral underdeveloped nations. They contend that the expansion of capitalism creates a cycle of dependency, where underdeveloped countries are exploited for resources and labor, thereby hindering their own autonomous economic development and perpetuating global inequality.

Radical structuralists saw a close relationship between underdevelopment and the expansion of capitalism. They believed that the process of capitalist imperialism led to the creation of underdeveloped countries, which in turn benefited the advanced capitalist nations. This concept originated from the works of authors like Immanuel Wallerstein and Andre Gunder Frank.

Neo-colonialism refers to the indirect control of developing nations by powerful states, often former colonial masters, through economic dependency, trade agreements, and political influence rather than direct military occupation. While these nations may possess formal judicial and political independence, their sovereignty is often constrained by the interests of global powers, ensuring that the former colonial power retains significant leverage over the nation's internal and external affairs.

Dependency theory literature is often divided into reformist and Marxist schools of thought. The reformist perspective, associated with scholars like Raul Prebisch, focuses on structural changes within the global economy to improve the position of developing nations. Conversely, the Marxist perspective, influenced by thinkers like Andre Gunder Frank, argues that the capitalist world system inherently exploits the periphery, necessitating a more radical transformation of the global economic order.

Dependency theory posits that the global economy is structured into a core and a periphery. The core nations dominate and condition the economic development of the peripheral nations. The reason provided correctly identifies that this relationship is fundamentally based on the core-periphery dynamic, where the periphery is structurally disadvantaged and dependent on the core for capital, technology, and markets, thereby explaining the nature of the dependency relationship.

Andre Gunder Frank, a key figure in dependency theory, argued that the economic development of core capitalist nations is intrinsically linked to the underdevelopment of peripheral nations. He posited that the global capitalist system creates a structure where wealth is extracted from the periphery to the core, thereby actively preventing the development of the former and perpetuating their dependency.

Dependency theory posits that periphery countries are structurally dependent on the core or center nations for high-value manufactured goods and advanced technology. While periphery countries often export raw materials and minerals to the center, they lack the industrial base to produce finished goods, creating an unequal exchange relationship. This dependency reinforces the economic dominance of the core and limits the industrial development of the periphery.