The penetration of capitalism does not necessarily transform traditional society, but creates backward socio-economic conditions. Underdevelopment involves dependence on the export of raw materials and on manufactured imports. Because commodities are subject to external price fluctuations, underdeveloped economies are exposed to inflationary pressures.
Underdeveloped societies have small industrial sectors, combined with large backward sectors.
Local markets are blocked by imports, low wages and low productivity. Underdevelopment theory is critical of modernization theory and Marxist development theory, both of which assumed the inevitability of capitalist development. Dependency Penguin Dictionary of Sociology 3. Imperialism Penguin Dictionary of Sociology 4. Internal Colonialism Penguin Dictionary of Sociology 5.