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This paper examines the literature since 1950 on the issues of development and dependency in developing countries. The premise is that both development and dependency theories have failed to take into account the complexity of real-life issues and circumstances in developing countries. The author holds that this failure is due to the ideological commitment of the two schools to capitalism and socialism respectively, resulting in a wide gap between theoretical concepts and the reality of development issues. A short summary of the principal theories and concepts of the two schools is presented, and the respective ideological commitments illustrated. Evidence is presented of the gap between theory and reality in development and dependency issues by examining the five main issues, which have confronted developing nations during the last two decades.