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Modernization theory is a socio-economic theory, sometimes known as (or as being encompassed within) Development theory, which highlights the positive role played by the developed world in modernizing and facilitating sustainable development in underdeveloped nations, often contrasted with Dependency theory.

During the 1950s, its initial focus was placed on the mass media as a modernizing force in the Underdeveloped World. Economically, the mass media was viewed as integral to the diffusion of modern forms of social organizations and technology over traditional economies, with literacy playing an especial cultural role in this. Modernization theorists also maintained that this would serve to promote a diffusion of liberal-democratic political ideals within less developed countries.

Several branches of the theory exist today, and it is generally viewed as a model whereby the Third and Second Worlds are seen to benefit (with aid and guidance from the First World) economically, politically, culturally, and demographically through the acculturation of the modern policies and values of the Western world.

A theory antithetical to the Modernization model which emerged largely as a response to it was Dependency theory. One of its earliest, and most critical of Modernization theory, branches was the one developed by Immanuel Wallerstein.

Wallerstein argued that the 'periphery' (the semi-periphery and periphery, both between and within countries) localities are, in fact, exploited and kept in a state of backwardness by the developed core; a core which profits from the peripheries' cheap, unskilled labour and raw materials (i.e. from those nations' lack of a skilled workforce and industries that can process raw materials locally).

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