This article examines the extent to which Third World nations' dependent position in the world economy contributes to intercountry differences in income inequality. International economic dependence is measured using investment dependence — the penetration of a country by foreign capital, commodity production concentration, and the degree to which a country relies on particular markets for its imports and exports. It is hypothesized that the effect of dependency on inequality is mediated by its effect on the uneven development of the productive capacities of a nation. Level of development is included as a control variable in the analysis. The results of a cross-sectional regression analysis indicate that dependency is related to uneven development, which in turn is associated with level of national income inequality.
