Economic Dependency

Definition

Economic dependency refers to a situation where one country relies heavily on another country for economic resources, trade, investment, or aid.

Analogy

Think of economic dependency as being similar to relying on your parents for money. If you don't have your own source of income and depend on your parents financially, you are economically dependent on them.

Related terms

Neocolonialism: Neocolonialism refers to the indirect control exerted by developed countries over developing countries through economic dominance and exploitation.

Import Substitution Industrialization (ISI): ISI is an economic policy aimed at reducing economic dependency by promoting domestic industries and reducing reliance on imported goods.

Foreign Direct Investment (FDI): FDI occurs when a company from one country invests directly in businesses located in another country. It can contribute to both economic development and increased economic dependency.