This study is an exploration of dependency theory and the Newly Industrializing Countries (NICs). The issues which are addressed are threefold: 1. An exploration of dependency theory, especially the variant of it that is advocated by Frank, Amin and Wallerstein. These authors have constantly maintained that growth is not possible in the Third World as long as the region is integrated into the world capitalist economy. The NICs, particularly Taiwan and South Korea are testimonies that that assumption is not entirely valid because they are incorporated and have also witnessed impressive economic growth. 2. An examination of the debate over the character of the NICs. An analysis of Taiwan and South Korea shows that they have experienced considerable economic growth. However, there is limited transformation in the standard of life of the citizens. 3. The factors that are responsible for the economic growth of Taiwan and South Korea are hypothesized. These factors are both external and internal to these countries. They are (a) a strongly polarized international ideological atmosphere which made these countries client states of the United States of America, (b) an inflow of massive aid from the U.S to these states and (c) the presence of a strong state apparatus in these countries. The state institutions combined internal creativity with the opportunities provided by the international scene to initiate and implement good strategies for their industrial transformation. The lessons other Third World countries can learn from Taiwan and South Korea is that East and West rivalry can create opportunities for strategic countries in the region of conflict. But the internal dynamics of the countries have to be responsible for seizing the chance and for utilizing it well. / Arts, Faculty of / Anthropology, Department of / Graduate