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neo-colonialism A term often applied to the economic situation of many former colonies after political independence has been secured. Neo-colonialist interpretations of economic development in the Third World suggest that, as a budget-saving and humanitarian act, political decolonization nevertheless left in-tact the West's monopolistic control over the production and marketing of goods in the former colonies. By using international law, corporate property rights, and the power of major commercial banks the former colonial powers could retain economic influence and control over their former dependent territories. In Marxist discourse this phenomenon is usually termed neo-imperialism.

Under neo-colonialism, as under direct colonial rule, the relationship between centre and periphery (or metropolis and satellite) is said to involve the export of capital from the former to the latter; a reliance on Western manufactured goods and services which thwarts indigenous development efforts; further deterioration in the terms of trade for the newly independent countries; and a continuation of the processes of cultural Westernization which guarantee the West's market outlets elsewhere in the world. The operations of transnational corporations in the Third World are seen as the principal agents of contemporary neo-colonialism, since (at least within dependency theory) these are seen as exploiting local resources and influencing international trade and national governments to their own advantage. See also CENTRE-PERIPHERY MODEL; COLONIALISM.

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