World Systems Theory - Definition, Examples, Critiques (2023)

The world systems theory states that the world exists as a single socio-economic system made up of a core, periphery, and semi-periphery. In this system, “surplus value” is transferred from the periphery to the core.

To better understand the world systems theory, it is helpful to begin with its components. These are three areas of the world:

  1. Core Areas – A small set of technologically advanced and industrialized capitalist nations/regions characterized by higher incomes, large tax bases, and high standards of living. In the 21st century, the developed countries that form the G-7 group, along with Chinacan be considered the core of the world-system.
  2. Periphery Areas – Poor countries that primarily subsist by exporting primary products such as agricultural produce and natural resources to the core countries. The periphery ischaracterized by a small tax base, low incomes, and low levels of human development index. In the 21st century, much of sub-Saharan African, parts of Latin America and Central Asia can be considered the periphery.
  3. Semi-Periphery Areas – These countries act as the periphery to core countries, and as a core to the countries on the periphery. Typically, such countries are regional powers with moderate levels of development indices and growing capitalist economies. In the 21st century, countries such as India, Brazil, Turkey, Mexico, Israel, Nigeria etc. can be considered the semi-periphery of the world-system.

Definition of World Systems Theory

Below is the classicdefinition of the world system by Wallerstein (1974):

  • A world system is a “multicultural territorial division of labor in which the production and exchange of basic goods and raw materials is necessary for the everyday life of its inhabitants.”

Coccia (2019) defines the world systems theory as:

  • “World-systems theory is a socioeconomic and political approach that explains the economic development and dynamics of capitalistic world economy analyzing the mechanisms of international market trade, economic division of labor between core and periphery regions, and interests of capitalist class in markets.”

World Systems Theory - Definition, Examples, Critiques (1)

Origins of the Theory

The world systems theory was proposed by the American sociologist Immanuel Wallerstein in the 1970s as an alternative to the then popular modernization hypothesis, which Wallerstein criticized on three grounds:

  1. It was built using only the nation-state as the unit of analysis.
  2. It proposed that there existed only one path to development for all states – the one followed by the developed countries. It was believed that the poor countries of today are simply primitive versions of the rich countries, and if they were to follow the same trajectory as that of the rich countries, would eventually become developed too.
  3. It did not take into account transnational structures such as large business corporations that influence the development of states.

Wallerstein believed that the modernization theory, and other such models were the product of nineteenth century ways of thinking that believed in compartmentalizing knowledge. Which meant that such an approach could only look at the problems of development and underdevelopment through the lens of either developmental economics or political science.

What Wallersein proposed instead was a unified system approach that did not limit itself to any one subject or approach for analyzing global issues but combined the spheres of society, economy, and politics.

Examples of World Systems Theory

1. The Knowledge Economy

(Video) World Systems Theory - Explained

‘Knowledge economy’ is a term used to describe economies marked by a high level of technical and scientific innovation in which employment demands high levels of technical and scientific knowledge.

Such an economy stands in contrast to primary economies based on agriculture or resource extraction, and manufacturing economies that are based on skilled or unskilled manual labor.

Jobs in a knowledge economy tend to be weighted towards the finance, technology, and services sector.

In the present world-system, the developed countries have a predominant position in theknowledge economy, with almost all leading technology and financial sector corporations located in developed countries or the core of the world-system such as the US, Canada, the UK etc.

The markets for knowledge economy products often tend to be in the peripheral or semi-peripheral countries. For instance, companies such as Facebook and WhatsApp have most of their users in countries such as India, Brazil, Indonesia, Mexico, Bangladesh, etc.

This global knowledge economy is not solely based on classification by nation-states alone, for within the peripheral and semi-peripheral countries there exist regions that are integrated within the global capitalist system.

For instance, cities such as Bangalore and Mumbai in India are recognized as global hubs of Information Technology (IT) and finance, even though they are located within a semi-peripheral country.

Thus, rather than there existing a simple dichotomy of core and periphery countries, the application of the world-systems theory to the knowledge economy reveals a far more complex and interconnected world-system.

2. The Politics of Climate Change and Carbon Emissions

The politics of climate change are characterized by an unequal exchange. The core countries have historically extracted more of the earth’s natural resources including fossil fuels that contribute to global warming and have used more of the earth’s capacity to act as a heat sink.

For example, we now know that the USA’s CO2 emissions are greater than that of all of the African continent combined, or that India has one of the lowest per capita levels of CO2 emissions in the world at 1/19th those of Canada.

The world-systems theory tells us that countries or regions that form the core of the world-system have higher CO2 emissions and must consequently have a greater share in the responsibility to combat climate change as compared to countries or regions that fall in the periphery.

3. Hidden Hunger and the Packaged Food Industry

(Video) World System Theory and its critiques

Hidden hunger is a form of malnutrition in which populations suffer from deficiency of micronutrients and vitamins, even though there may not appear to be any evident starvation.

Hidden hunger mostly results from consumption of empty calories found in packaged food and sweetened beverages.

While the global packaged food giants concentrated in the “core” countries, their products find big markets in the “periphery” countries.

It has been documented that 18 of the 20 most severely affected countries by hidden hunger are in sub-Saharan Africa, while the remaining two are in the South Asian nations of India and Afghanistan (Muthayya et al.,2013).


1. It Explains Internal Inequalities

Since the world systems theory does not take the nation-state as the primary unit of analysis, it helps explain internal inequalities within nation-states better than other developmenttheories such as the modernization theory or the dependency theory.

For instance, India, a country in the semi-periphery of the world system is home to more than 200 million people living in poverty as defined by the World Economic Forum, while at the same time having the third highest number of billionaires in the world (177), after only the US and China.

Application of the world systems theory helps us understand that there are several regions within the peripheral and semi-peripheral countries that are deeply integrated with the global capitalist structure. The regional hubs within nations serve as the core to the peripheries located within the same countries.

This demonstrates a much more complex and nuanced model of global inequalities than simple classifications of first world and third world countries or developed, developing, and underdeveloped countries that other models provide.

Exploitation of a periphery by a core does not happen at the level of nation-states alone; a core within a country can also exploit a periphery within the same country leading to sharp regional inequalities.

2. Human-centric Rather than System-centric

The world systems theory conceptualizes the entire world as one unified system rather than made of different systems and structures. In the words of Frank & Gills (1993) it allows us to see ‘a common river and unity of history in a single world system [that is] multicultural in origin and expression’.

3. Cross-domain Applicability

(Video) C3: World Systems Theory

The world systems theory can be applied to a number of fields including gender studies, ethnic and racial discrimnaiton studies, political geography, international relations to name a few.

For instance, a gender studies analysis of the world system reveals the manner in which women’s labor is exploited within a capitalist system controlled by men. Nash (1988), in an analysis of the Iranian carpet making industry has shown how carpet making households led by men were located in a periphery relative to the core regions of the developed world to which these carpets were exported. Within the household however, much of the carpet-weaving work was carried out by women while the men controlled the finances, replicating the core-periphery relationship, this time within the household, and with a highly gendered aspect to it.

Criticisms of World Systems Theory

1. Insufficient Grounding in Empirical Data

Because of its wide scope, empirically grounded studies justifying the hypotheses of the world systems theory are still emerging. The theory has been critiqued for presenting too many broad generalizations and not presenting a falsifiable hypothesis.

2. Overemphasizing the Role of Globalization and Capitalism

The world systems theory, in putting forward the notion of a unified world connected by networks of global capital, makes two assumptions that do not always hold true – one of globalization and the other of the inevitability of capitalism.

For instance, Balkilic (2018) has shown how local dynamics in the coffee plantations of the Caribbean developed independently of any global influences. Similarly, several countries such as Bhutan still remain outside the purview of the global capitalist system.

3. Ignores Socio-cultural Causes of Underdevelopment

Even though the world systems theory claims to be a unified approach combining the spheres of economy, politics, and society, it ends up relying too heavily on economic causes of underdevelopment while ignoring others such as culture, religion, tradition, etc.

For instance, the Indian caste system does not have any economic basis, being grounded in scriptural and traditional origins. Yet, it is widely acknowledged to be a system that kept millions oppressed and deprived. (Fuller 1973).

In fact one of the reasons Marxist theories failed to find much support in India was their insistence upon class as the primary system of oppression, when in fact, caste played an equally important, if not greater role, in India’s underdevelopment.

Not to be Confused With…

The Dependency Theory

The dependency theory is a theory in economics that is a predecessor and an immediate influence on the world systems theory. The theory took birth in 1949 from the work of the Argentinian economist Raul Prebisch.

It directly critiqued the postulate of the modernization theory which stated that the underdeveloped countries of today are just a primitive version of the developed countries, and provided enough stimulus in the form of investment and technology transfer, can be put on the path to development.

(Video) World-Systems Theory, Dependency Theory and Global Inequality

Prebisch challenged this hypothesis by claiming that such investments and infusion of capital into underdeveloped countries only serve to further their dependence on foreign capital.

Prebisch was the first to use the terms core and periphery to describe this relationship – a terminology that Wallerstein later built upon for his own world systems theory. Prebisch was particularly interested in the curious case of Argentina, that, beginning the 20th century as one of the richest countries in the world on account of its strong agrarian exports, failed to keep pace with other rich countries of Europe and North America, eventually sliding into a seemingly interminable cycle of economic stagnation and political crisis.

However the world systems theory differs from the dependency theory in that it rejects Presbisch’s formulation of nation-states as the primary unit of analysis. As Wallterstein explained, core and periphery can exist within the same country too.

Wallerstein also devised a three-tiered model comprising a core, semi-periphery, and a periphery as opposed to Prebisch’s binary division. Finally, Wallterstein intended his formulation to be an interdisciplinary approach to understanding the world, whereas Presbisch’s work was a theory in macroeconomics.


Balkiliç, O. (2018). Historicizing world system theory: Labor, sugar, and coffee in Caribbean and in Chiapas. Gaziantep University Journal of Social Sciences. 17 (4), 1298–1310.

Coccia M. (2019) Comparative World-Systems Theories. in Farazmand A. (eds) Global Encyclopedia of Public Administration, Public Policy, and Governance. New York: Springer.

Frank, A.G. & Gills, B.K. (1993) The World System: Five Hundred Years or Five Thousand? London: Routledge.

Fuller, C. (1973). Caste and class, or the anthropology of underdevelopment. Cambridge Anthropology, 1(1), 1-9.

Muthayya, S., Rah, J. H., Sugimoto, J. D., Roos, F. F., Kraemer, K., & Black, R. E. (2013). The global hidden hunger indices and maps: An advocacy tool for action. PloS one, 8(6), e67860.

Nash, J. (1988). Cultural parameters of sexism and racism in the international division of labor.Racism, Sexism, and the World-System, Studies in the Political Economy of the World System, 11-38.

Labor. in Smith, J., Collins, J. Hopkins, T. & Muhammad, A. (eds.) Racism, sexism, and the World-System. (pp. 11-38). Greenwood Press.

Wallerstein, I. (1974). The Rise and future demise of the world capitalist system: Concepts for comparative analysis. Comparative Studies in Society and History, 16(4), 387-415.


What are some criticisms of the world Systems Theory model? ›

World-systems theory has attracted criticisms from its rivals; notably for being too focused on economy and not enough on culture and for being too core-centric and state-centric.

What is an example of the world Systems Theory? ›

Examples of World Systems Theory

Such an economy stands in contrast to primary economies based on agriculture or resource extraction, and manufacturing economies that are based on skilled or unskilled manual labor. Jobs in a knowledge economy tend to be weighted towards the finance, technology, and services sector.

What is an example of Wallerstein's World Systems Theory? ›

India and Mexico are two good examples. According to Wallerstein, core countries are technological and economic hubs that attract the best talent and use the labor and materials provided by peripheral countries.

What does the world system theory explain? ›

Definition of World-systems Theory

(noun) Theory asserting that most nations are part of a worldwide interdependent economic and political system based on the unequal exchange in the division of labor and allocation of resources between core nations, semi-peripheral nations, and peripheral nations.

What are the criticisms of modernization theory? ›

The modernization theory is polarized in its reception. Critics argue that the theory and model do not take into account the differences between capitalistic vs. communistic societies. Modernization theorists only see western economies as completely modern and deem other economies to be unevolved or primitive.

What is one main assertion the world Systems Theory? ›

The chief assertion of this theory is that the capitalist system has been the world economic system since the sixteenth century and that one cannot talk about economies in terms of the nation-state, nor of 'society' in the abstract, nor of 'stages' of development, because each society is affected by, indeed is a part ...

What is world-system simple definition? ›

A world-system is a socioeconomic system, under systems theory, that encompasses part or all of the globe, detailing the aggregate structural result of the sum of the interactions between polities. World-systems are usually larger than single states, but do not have to be global.

How will you explain the world-system of Wallerstein in a simple context? ›

For Wallerstein, "a world-system is a social system, one that has boundaries, structures, member groups, rules of legitimation, and coherence. Its life is made up of the conflicting forces which hold it together by tension and tear it apart as each group seeks eternally to remold it to its advantate.

What is modern world-system in simple words? ›

The modern world-system is a capitalist world-economy which is the geohistorical system in which we live. The basic geohistory is that it was constructed in Europe in the “long” 16th century, it expanded to cover the whole world by c.

What are the three parts of Wallerstein's theory? ›

According to Wallerstein, the world economic system is divided into ahierarchy of three types of countries: core, semiperipheral, and peripheral. Core countries (e.g., U.S., Japan, Germany) are dominant, capitalist countries characterized by high levels ofindustrialization and urbanization.

What are the characteristics of world system theory? ›

The world systems theory is established on a three-level hierarchy consisting of core, periphery, and semi-periphery areas. The core countries dominate and exploit the peripheral countries for labor and raw materials. The peripheral countries are dependent on core countries for capital.

Who made the world system theory? ›

World Systems Theory. The World Systems Theory was articulated in large part by Immanuel Wallerstein, who argued that in economics there are three types of economic nations - the core, the semi-periphery, and the periphery.

What are the negative effects of modernization? ›

The dependency theory claims that there are certain social groups that are more exposed to the negative effects of modernization. These groups are characterized by low levels of education, low literacy rates, extreme poverty, and social fragmentation.

What is an example of modernization theory? ›

One example of a Modernisation Theory is Rostow's Economic Stages of Growth. This model suggests that countries go through a predefined set of five stages before becoming a fully developed nation.

What is the conclusion of World-System Theory? ›

The main conclusion of the study is that the world-systems theory is reliable when used to explain three themes in world politics. These are global inequality, dependency and sovereignty. Key Words: World Politics, Marxism, World-System, Inequality, World-Market, Core, Periphery.

Is World Systems Theory Marxist? ›

World-system analysis constitutes a significant modification of traditional Marxist principles that includes the non-core as a systemic aspect of capitalism.

What is the world Systems Theory quizlet? ›

World Systems Theory says the countries are exploited by the core countries but they also exploit the periphery countries. In the theory, because they exploit as well as being exploited, they aren't fully 'on the same side' as the periphery countries.

Why the system approach is Criticising? ›

Limitations of System Approach:

1. Critics of this theory claim this as a theoretical approach to management. The way an organisation actually works and solves problems (by applying different techniques and methods) has no appeal in the theory.

What is the world Systems Theory quizlet? ›

World Systems Theory says the countries are exploited by the core countries but they also exploit the periphery countries. In the theory, because they exploit as well as being exploited, they aren't fully 'on the same side' as the periphery countries.

What are the characteristics of world system theory? ›

In summary, the world systems theory suggests that while the world economy is ever changing, there are three basic hierarchies of countries: core, periphery, and semi-periphery. Core countries dominate and exploit peripheral countries. Peripheral countries are dependent on the core countries for capital.

What conclusion did Wallerstein come to when creating his model? ›

What conclusion did Wallerstein come to when creating his model? what countries are seeing the largest increase of urbanization and growth of megacities. Developing countries are the ones who are traditionally dependent on one or two commodities.


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