Why are poverty and inequality greater in some countries than others? We are exploring different perspectives or theories of global inequality to answer this question. These include modernization, dependency and world systems theories. Modernization holds that poor countries are poor because they lack modern technology and values. Dependency theorists acknowledged that the Western or First world did bring many things to poor nations (i.e., The Third World), but that most of them were negative and destructive. The destruction came with colonial empires but continued (via neocolonialism) after poor countries achieved independence" (Sernau 26-30). Following the approach of dependency theory, world systems theory takes dependency theory a step further with the view that "colonial powers created a world economic system that enriched the core nations at the expense of the periphery (i.e., their colonies)" (Sernau 30).
Economist, Hernando de Soto, author of the book The Mystery of Capital, has a unique perspective on global inequality. According to de Soto, entrepreneurism is part of human nature and capitalism works as long as certain conditions exist. The source of extreme poverty in developing countries is a lack of property rights. With property rights, he argues, "capitalism is a tool for poor people to prosper",(Commanding Heights Chapter 19: Capitalism Redefined).
Another approach to solving the problem of global poverty is the formation of cooperatives.
"A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise" (Source: ICA Statement on the Cooperative Identity).
The following video from the National Cooperative Business Association explains how cooperatives work to give the poor in developing countries a chance to improve their economic future.
http://www.youtube.com/watch?v=GXGm_ZG55Eg
