The modernization theory provides a theoretical framework for analyzing the process of development. This approach outlines the key role of western capitalism and the set of values and principles that are associated with it in economic progress. The theory suggests that emerging nations need to adopt the practices of the developed world to facilitate the development of the market economy in their countries. This framework also emphasizes the importance of technological progress and modern way of thinking, assuming that they make a substantial contribution to economic development.
The modernization theory shows international organizations in a positive light, stating that these institutions encourage the developing nations in their efforts for modernization. This approach suggests that the IMF, the World Bank, and other international bodies support stability and economic growth around the world. Thus, according to the key assumptions of the modernization theory, the system of global economic relationships functions efficiently, providing the right environment for future progress. This school of thought outlines that outdated ways of thinking and failure to adopt a new, more progressive lifestyle are the main barriers that hinder the development. The theory suggests that nations should abandon the traditional principles and embrace the modern mindset, promoting the ideas of capitalist society.