Final answer:
Technological progress can lead to increased inequality through the digital divide, while democracy aims to reduce inequality but effectiveness varies. Modernization theory does not establish a clear causal link between economic growth and democracy.
Step-by-step explanation:
The statement "Technological progress increases inequality, while democracy reduces inequality" is not categorically true or false as it oversimplifies complex social dynamics. Technological progress can indeed exacerbate inequality by creating a digital divide where access to new technologies is unequally distributed, often benefiting those in urban areas or with better resources while leaving others behind. For instance, the diffusion of technology like water purification systems is slower in peripheral and semi-peripheral nations, impacting those who may need it most.
On the other hand, democracy aims to reduce inequality by providing equal rights and a say in governance for all citizens, potentially leveling the playing field. However, the effectiveness of democracy in reducing inequality depends on myriad factors, including how well democratic institutions function and whether there are policies specifically aimed at reducing inequality.
Answering the true/false question about modernization theory, it has not established a clear causal link between economic growth and democratic institutions. While some believes that economic growth may lead to democratic reforms, there is no consensus, and the relationship is complex.