In order to get the jobs at all, some of these nations are forced into virtual bidding wars to see which nation will allow them to pay the lowest wages in order to get the company to build a manufacturing plant in that nation. For those, dependency theory seems to be more appropriate. The foreign debt is at least partly undertaken to finance the development of infrastructure, production of electricity, and the building of factories. But it should be noted that in most of the least developed nations, much the debt has been undertaken to finance purchases of military hardware. From the standpoint of dependency theory, courting excessive spending on high-tech but unnecessary military hardware is simply another way by which better developed nations have profited at the expense of less developed countries.
Foreign debt is a major contributor in most of the less developed nations to significant inflation.
In many countries, double-digit inflation is a perennial problem. In some nations, such as Brazil, double digit inflation has forced interest rates so high that those with a little surplus cash can make its owner money when deposited overnight. In countries with cash-strapped governments, the government cannot support an extensive social service or public welfare system such as the ones found in the highly industrialized nations. Lacking a government-sponsored welfare and social service system, families have to develop ways to care for their own members who are too young, too old, or too sick to engage in economically productive activities. Indeed, families have traditionally performed those functions before governments and economies were sufficiently well-developed to be able to create extensive welfare services.