Dependency theory
The development disparity between the North and the South has sometimes been explained in historical terms. Dependency theory looks back on the patterns of colonial relations which persisted between the North and South and emphasizes how colonized territories tended to be impoverished by those relations. Theorists of this school maintain that the economies of ex-colonial states remain oriented towards serving external rather than internal demand, and that development regimes undertaken in this context have tended to reproduce in underdeveloped countries the pronounced class hierarchies found in industrialized countries while maintaining higher levels of poverty. Dependency theory is closely intertwined with Latin American Structuralism, the only school of development economics emerging from the Global South to be affiliated with a national research institute and to receive support from national banks and finance ministries. The Structuralists defined dependency as the inability of a nation's economy to complete the cycle of capital accumulation without reliance on an outside economy. More specifically, peripheral nations were perceived as primary resource exporters reliant on core economies for manufactured goods. This led the Structuralists to advocate for import-substitution industrialization policies which aimed to replace manufactured imports with domestically made products.