Honduras: Lack of Economic Freedom or Victim of Global Economic System? Bridging the Gap between Dependency Theory and Neoliberal Economic Theory in Developing Countries

Abstract

Dependency theorists focus on the economic history of developing economies and the scarce benefits they have received in comparison to developed economies. Although founded in truth, they fail and neglect to highlight the positive benefits of the neoliberal economic system. In contrast, Neoliberals blame the lack of economic freedom, infrastructure, and levels of corruption in developing economies as the culprits inhibiting the benefits of neoliberal policies from flourishing. Hence, both theories neglect the valid points made by the other, resulting in an either-or argument. Herein lies the fundamental issue, since strictly adhering to the policies set forth by one cannot miraculously bolster the economy of a developing country. Thus, the argument of this paper is two-fold. First, by focusing on the economic history of developing countries it will showcase the circumstances that have allowed for Marxists ideologies to persist, specifically in Latin America. Secondly, by concentrating on the changing nature of multinational corporations, it will highlight the benefits of foreign direct investment and how it is essential for boosting the economy of developing economies. Thus, the overall aim of this paper, by focusing on Honduras, is to recognize that in light of the economic history of developing countries, the benefits of neoliberalism are not enough to positively impact the severe social disparities that are all too common in developing economies.