World Systems Theory

Core countries exploit those on the periphery in a global economic system.

Last Updated on February 6, 2023 by Karl Thompson

World Systems Theory was developed by Immanuel Wallerstein in the late 1970s. He argued that a global economic system had developed consisting of three Zones: core, semi-periphery and periphery and that core countries (mainly those in the west) exploited peripheral countries (mainly those in the global south) working with international institutions such as the World Bank and IMF to do so.

Wallerstein built on the ideas of Dependency Theory but believed that it was no longer the case that individual nation states exploited other nation states through crude colonialism, rather a more complex global system had evolved.

Wallerstein accepts the fact ex-colonies are not doomed to be forever trapped in a state of dependency; it is possible for them to climb the economic ladder of development, as many of them have done. However, he also believes that the global capitalism system still requires some countries, or at least regions within countries to be poor so they can be exploited by the wealthy at the top.

Immanuel Wallerstein
Immanuel Wallerstein developed World Systems Theory.

A summary of Wallerstein’s World Systems Theory including the key ideas of Core, Semi-Periphery and Periphery countries, relevant to A Level Sociology Global Development Module.

World Systems Theory

Wallerstein’s theory has four underlying principles:

  1. We now have a global economic system above the level of the nation state, which should be our level of analysis.
  2. The modern world system is organised into core, semi-periphery and periphery nations.
  3. Core nations exploit peripheral nations
  4. Countries can be mobile, up or down the power structure in this system

Analyse the global system as a whole

One must look at the world system as a whole, rather than just at individual countries. Dependency Theory tended to argue that countries are poor because they used to be exploited by other countries. However focusing on countries (or governments/ nation states) is the wrong level of analysis.

Governments today have declined in power, whereas Corporations are more powerful than ever. Global Corporations, and global capital, transcend national boundaries, and nation states (even wealthy ones) are relatively powerless to control them, thus in order to understand why countries are rich or poor, we should be looking at global economic institutions and corporations rather than countries.

The Modern World System

Global Economic Institutions form what Wallerstein called a Modern World System (MWS) , and all countries, rich and poor alike are caught up in it.

Wallerstein believed that the MWS is characterised by an international division of labour consisting of a structured set of relations between three types of capitalist zone:

Core-Periphery and Semi Periphery Countries
Core-Periphery and Semi Periphery Countries
  • The core, or developed countries control world wages and monopolise the production of manufactured goods.
  • The semi-peripheral zone includes countries like South Africa or Brazil which resemble the core in terms of their urban centres but also have areas of rural poverty which resemble the peripheral countries. The core contracts work out to these countries.
  • Finally, there are the peripheral countries at the bottom, mainly in Africa, which provide the raw materials such as cash crops to the core and semi periphery. These are also the emerging markets in which the core attempts to market their manufactured goods.

NB ‘countries’ are used to illustrate the three different zones above, but technically you could have all three zones within one country – China and India contain regions which fit the descriptors for each of the three zones.

Core countries exploit peripheral countries

The Modern World System is dynamic – core countries are constantly evolving new ways of extracting profit from poorer countries and regions. Three examples of new ways of extracting profit from poor countries include:

Unfair Trade Rules (we come back to this in the next topic) – World trade is not a level playing field – The best example of this is in Agriculture – Agriculture is Africa’s biggest economic sector. It has the capacity to produce a lot more food and export to Europe and America but it can’t because the EU and America spend billions every year subsidising their farmers so imported African products seem more expensive.

Western Corporations sometimes use their economic power to negotiate favourable tax deals in the developing world. A good case in point here is the mining Company Glencore in Zambia – The company recently arranged a long term contract to mine copper with the Zambian government – it exports $6 billion a year in copper from Zambia, but pays only $50m in tax, while as part of the deal the Zambian government is contractually obliged to pay for all the electricity costs of mining – a total of $150m a year.

Land Grabs – These are currently happening all over Africa – Where a western government or company buys up thousands of hectares of land in Africa with the intention of planting it with food or biofule crops for export back to western markets. In such cases the western companies take advantage of the cheap land and gain much more than the African nations selling the land in the long term. In some case studies of land grabs thousands of indigenous peoples are displaced.

Countries can move up or down

Countries can be upwardly or downwardly mobile in the world system. This is one of the key differences between World System’s Theory and Frank’s Dependency Theory. Many countries, such as the BRIC nations have moved up from being peripheral countries to semi-peripheral countries. However, most countries do not move up and stay peripheral, and the ex-colonial powers (the wealthy European countries) are very unlikely to slip down the global order.

Evaluating World Systems Theory

There are more causes of underdevelopment than just economic dominance through Capitalism, such as cultural factors, corruption and ethnic conflict. There are other ways people can be exploited and oppressed – such as tyrannical religious regimes for example.

Some areas are still not included in the World System – some tribal peoples in South America and Bhutan for example remain relatively unaffected by global capitalism.

Wallerstein’s concepts of Core, Semi-Periphery and Periphery are vague and this means his theory is difficult to test in practise.

Signposting and Related Posts

This material is mainly relevant to the Global Development option taught as part of the second year in A-level sociology.

World systems theory is a response to the criticisms of Dependency Theory (and for the purposes of the exam can still be treated as part of Dependency Theory).

NB This is very much a summary designed to get an 18 year old through an exam, so may not suit higher level students.  

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