What Are the Causes of Underdevelopment?

What Are the Causes of Underdevelopment

Abstract

Exploring the causes of underdevelopment is a serious concern since this endeavour will lead to improved understanding of factors that lead to this harmful phenomenon and subsequently enable governments and international organisations to design more effective programs to address the problem . A number of theories have been put forward to explain the persistence of underdevelopment in some nations that seem to resist efforts at improving their political and economic situations . This will sort out these perceptions and factors that account for harmful patterns

. This understanding will help in the design of effective programs aimed at developing the laggards of international progress helping them improve living standards of their citizens

Introduction

The concept of national underdevelopment was introduced in the 1960s by Andre Gunder Frank to describe the effects of colonial legacy in South and Central Americas . Since then , it became appropriate to speak of developed and less developed countries , a terminology also applied by the United Nations . Less developed nations suffer from lack of access to fresh water , health care , starvation , inadequacy of housing , educational establishment that for the most part stem from a low per capita income

Political Aspects

Many regions of the world that demonstrate marked underdevelopment are characterised by overt concentration of power in the hands of a rich minority that uses this power to oppress the majority . For example , the North-eastern areas of Brazil that rely on sugar production as the primary source of income are seriously underdeveloped as compared to the rest of the nation . The property patterns in this region are the history of the dominant class manipulating social , political , and economic institutions so as to expropriate the maximum possible surplus from the rural workers (Taylor , 1978 ,

. 157 . The economic interests of the land-owning class lay in extracting as much as possible from their plantations and workers as opposed to investing in the area . The result is miserable since an area that specialises in agricultural production cannot even feed its own citizens and has to import most of its agricultural produce from the rest of the nation . With a stagnant economic situation , the north-eastern Brazil has suffered from health education , and literacy standards that ended in a peasant revolt in the 1960s (Taylor , 1978 ,

. 157 . Similarly , in the Philippines , despite a revolution in the 1940s , the domination of the landlords and their control , in alliance with export interests , over the national Congress was never broken (Walton , 1984 ,

. 179

Express inequities between different groups inside one nation are one of the most serious obstacles to successful development of countries . When only a small fraction of citizens are privileged to enjoy a high living standard , the fate of the rest is to consume on a very limited scale The result will be inadequate facilities for the majority of the population including poor schools , hospitals , housing and others

Another example is Jamaica where the so-called invidious distinction has been cited as one of the primary causes of underdevelopment Invidious distinction ' includes actions designed to lend status wealth , or power to one group while specifically denying such to another--the very antithesis to the growth process (Eliot , Harvey 2000 ,

. 393 . Directly interrelated with this distinction is the issue of conspicuous consumption . This means that the ruling , economically prosperous class spends most of the income on displaying their wealth Investing money in status symbols , the rich give up funds that they could have put in economic development , spearheading their businesses if any , or , perhaps even less realistically , in programs aimed at helping the poor Jamaicans

The history of political development in Jamaica reveals a harmful pattern that can be generalised to a number of other poorly developed areas . Starting from the 17th century , the land ownership was concentrated in the hands of a small group of rich landowners Throughout the political upheavals in the small island state , these landowners kept their influence and privileges , leading to the marginalization of the peasant farmers (Eliot , Harvey , 2000 ,

. 394 With the onset of the industrial age , peasant farmers turned into low-salaried industrial workers that created the class of the city poor The preservation of elites ' privileged status has perpetuated income inequality , in consequence preserving the underdevelopment patterns

The pattern of economic inequality is not unusual or appearing in only a separate selection of countries . More or less this model can be traced in the evolution of political systems in nations that today definitely belong to the industrialised world - the United States , Australia , the European powers , Japan and others . However , in those nations political developments at one point have empowered much broader masses of people on the one hand , increasing the income available to salaried workers . On the other hand , employees received an opportunity to participate in profits through share purchases . For different reasons , in underdeveloped nations , the elites have for the most part kept control of the economic benefits , promoting unequal distribution of income

Economic Factors

In addition to political factors , the underdeveloped nations typically lag behind their developed neighbors in terms of GDP and other indicators of economic development . This lagging can be attributed in part to the fact that underdeveloped nations often depend on industries that have a low value added or manufacture products that are not competitive in global markets . Thus , these nations often depend on agricultural production that is seldom competitive or output of commodities that is subject to serious fluctuations

A theory developed by Colin Clark in 1940 states that economic development has to proceed in a distinct sequence including development first of agriculture , then of industry and finally of services (Labini , 2001 ,

. 98 . Using this theory , one can state that underdeveloped nations are still in the first stage where their output mostly depends on agricultural goods . This , for instance , is the case in the above-mentioned area of north-eastern Brazilian provinces that depend almost exclusively on sugar production (Taylor , 1978 . This makes their economies vulnerable to demand for these products that fluctuate in accordance with business cycles

There are , as stated above , different theories of underdevelopment , and one of those is the one developed by the American economist W .W . Rostow who divided the development of advanced nations into five stages of growth : traditional society , creation of preconditions for take-off take-off , drive to maturity , and the age of high mass consumption (Taylor , 2001 . According to this theory , the less developed nations simply took off later than their rich neighbors or even have not done so . Other scholars contradict this linear development , pointing out that nations that `took off ' later often found themselves at a disadvantage as compared to those who were developing earlier . In theory , the less developed regions could benefit from the so-called spread effects that cause the relocation of capital from more developed to less developed areas with plenty of cheap labor . However , Gunnar Myrdal , 1974 Nobel Prize winner , believed that the spread effects that were supposed to transmit economic development from rich to poor countries were often outweighed by backwash effects ' in which the capital flew back to wealthier countries where it enjoyed greater protection (Taylor 2001

Regional Inequalities

Many travellers to nations like China , India or the Caribbean are immediately impressed by the contrast between squalor of provincial areas and the apparent luxury of large cities and some `advanced ' areas Regional inequalities contribute to underdevelopment , creating a situation when some areas are on their way toward modernisation , while others are forced into the backseat of social and economic progress

The importance of regional inequalities as source of underdevelopment is explored , for instance , in Andre Gunder Frank 's 1989 publication The Development of Underdevelopment . Frank (1989 ) challenges the view that underdeveloped nations are still going through the stages that more developed countries are done with . Instead , he asserts that problems of underdeveloped areas are the inevitable result of the capitalist system The same , in his mind , is true of the regional disparities observed in the underdeveloped nations where the capital and larger cities often stand out as oases of advancement among the generally gloomy landscape around . The underdevelopment phenomena in the province are the products of the historical development of the capitalist system no less than are the seemingly more modern or capitalist features of the national metropoles of these underdeveloped countries (Frank , 1989 ,

br 37

To address the economic foundations of underdevelopment , Frank (1989 advances the hypothesis that the backward areas in these countries have been exploited by capital cities and other large entities just as the metropoles previously had exploited their colonies . Thus , San Paolo may be in the same dominating role to the retarded Brazilian areas as the European colonizers were in relation to San Paolo itself . The metropole areas de-capitalise the provinces , through their own control regulate their development and prevent the rise of living standards in provincial areas . This exploitation , according to Frank , is the inevitable result of the capitalist development model

Dependency Theory and Colonial Heritage

Many have tried to draw upon the legacy of the colonial system to explain the reasons for underdevelopment in many areas of the world Most areas that suffer from poverty today are former colonies the developed nations , for the most part , are former metropoles . The colonizers exploited their underlings in colonies , turning them into suppliers of cheap raw materials and restricting the infrastructure construction , leaving former colonies with only basic facilities . In many cases , when the colonizers departed , the nations were left with artificial boundaries that separated them from each other without regard for their historical development . This fuelled subsequent separatism and military conflicts , hampering economic progress . Thus , if one looks at straight-line boundaries in Africa , it becomes obvious that those were artificially created

The colonizers , in particular the British Empire , were suppressing the industrial development in their colonies because they viewed them as sources of cheap imports and at the same time large markets for their industrial goods . Reverting to the same example of north-eastern Brazil that often surfaces in literature on underdevelopment , Taylor (2001 claims that northeastern Brazil in the 19th century would have appeared to be an ideal place for a textile industry ' with its high quality cotton and existing demand for sugar bags cloth and slave clothing . However , to develop the textile industry , it would take years during which the industry should have been shielded from foreign competition with import tariffs and quotas . This was surely not something Britain would allow in its colony . As a result , the fledgling Brazilian textile enterprises proved unable to withstand the competition with Britain 's textile industry

Britain , like almost any metropole , was interested in selling to the colony , not developing industry inside it . As of 1822 , when Brazil received independence , it was a larger export market for Britain than all the rest of Latin America combined (Taylor , 2001 . Naturally , even as Brazil proclaimed independence , Britain did not want to lose this lucrative market and demanded a trade treaty with Britain which prohibited import substitution tariffs (Taylor , 2001 . Brazil was forced into this treaty by its political weakness

In this way , former metropolitan powers keep control of their former colonies to varying extents , blocking their effective development . In newly independent nations of Latin America , for instance , the warfare that often preceded proclamation of independence devastated regional and national economies (Kinsbruner 1994 ,

. 126

Although this perspective is not universally recognised , many people in the developing world believe that richer nations are effectively precluding their development . In particular this effort is blamed on the International Monetary Fund and the World Bank policies said to aggravate underdevelopment in the Third World

International Monetary Fund and the World Bank : Promoting Development or Blocking Advancement

The stated goals of both institutions are certainly to spearhead economic growth in nations they service with their financial programs Critics , however , point out that loans from the World Bank and the IMF often come with conditions that block the road to sustainable development and make poverty even worse . They insist that policies pursued by these institutions [are] part of the logic of capitalist expansion , serving the interests of transnationals , careless of the environment (Amin , 1995 ,

. 8

The Structural Adjustment Policies (SAPs ) imposed by the IMF as a prerequisite for qualifying for its loans often aggravate the deplorable condition of the poor nation . Thus , SAPs often call for reduction in government expenditures for health , education and other government services for the sake of debt repayment . In this way , poor nations are dragged into the quagmire of debt repayment , as their interest provides income for Wall Street banks and other financial institutions . IMF policies urge developing nations to increase their exports of raw materials and agricultural products in to cope with debt - an immediate concern . This , however , reduces the amount of food available to the poor inside the country and can lead to starvation second , does not create conditions for building processing industries that will increase value added inside the country . Besides , the IMF often demands for liberal market reforms that involve privatisation that , without proper preparation and evaluation of potential consequences , can lead to loss of jobs , aggravation of the social situation and civil unrest . Such measures lead to social discontent that can hamper the development of economies in developing countries . With respect to harmful policies imposed by the fund , Amin notes that they key to development is subordination of outside relations to the logic of internal development and not the reverse ' as it is happening when development policies are imposed by outside financial institutions (Amin , 1995 ,

br 10 . The harmful role of the World Bank and the IMF in the development of poor nations is by no means indisputable . However , there are many criticisms aimed at the policies that accompany loans and the very idea of reaping interest income off the populations of the nations where starvation is a widely spread phenomenon

Demographic Factors

Many developing nations are experiencing rapid increases in population size , which gives researchers the reason to talk about the overpopulation and its impact on poverty . This , for instance , is the case in Haiti where a large population density has contributed to the depletion of the island 's scarce resources

In underdeveloped nations , the population increase that was experienced by the developed nations much earlier is happening at this time . Since the end of the nineteenth century , the death rate began to decrease , a fact caused by advancement of health care and drop in the number of victims from natural calamities . This population explosion was experienced by the advanced nations much earlier , while the underdeveloped ones are going through this process right now . Although this demographic boom is slowing down in less developed nations absolute increase of their populations is still large such an increase tends to aggravate poverty or makes it difficult for per capita incomes to rise (Labini , 2001 ,

. 122

Thus , one can suppose that the rise in the economic development of these nations will not be speedy enough to offset explosive population growth This view is similar to Ricardo 's theory that in itself drew upon Malthus ' population theory . Thus , Ricardo believed that in agriculture the algebraic sum between diminishing returns and the productivity growth owing to technical progress was likely to be negative - in the sense that the increase of food production was likely to be slower than the increase of population (Labini , 2001 ,

. 123 . Whether one believes in Ricardo 's hypothesis or not , it is certain that a larger population is more difficult to feed , and rapid population growth requires an adequately high level of development to keep the supply at least on the same level

Cultural Factors

Culture , to some degree , can also adversely impact development or contribute to it . The modern world is patterned to a great extent after the Western cultures of the nations that have a dominant role in this world . Those that do not fit into these patterns will not achieve success as their development would ideally proceed along different lines

An example can be the case of Native Americans in Canada . Although living in a highly developed and prosperous nation , the Aboriginals fail to attain economic well-being . One reason that precludes their success is supposed to be their culture that envisages collective ownership and sharing of resources , as opposed to the idea of individual private rights that characterizes Western culture (Kendall , 2001 ,

. 43 Industrial technology best develops in conditions that favour private ownership however , for Native Americans , it often means they have to abandon their cultural values

Education and Training

A well-trained and educated workforce is the necessary precondition for successful economic development . The presence of a large educated population contributes to India 's current rise as an outsourcing destination , although it has so far failed to ensure overall prosperity in this nation

This problem , for instance , is addressed in Canadian programs targeting development of Aboriginal areas . The Indian entrepreneurship has to be supported with knowledgeable workforce that will attract capital flows to the areas . Although the fact that Native Americans missed the industrial revolution ' has its upside , as there is no need for re-training , integration of these people into the complex web of the global economy is a serious challenge (Kendall , 2001 ,

. 43 . Similar problems are experienced by many developing nations only in their case unlike the situation of Aboriginal populations in Canada , there is no strong nation to back them up in the efforts to increase their education

Conclusion

The sources of underdevelopment are multiple . More often than not different factors of underdevelopment will be present in areas affected by this problem , intertwined and perpetuating each other . Thus , the political situation marked by elite domination perpetuates economic inequalities that in their turn cause inadequacy of educational facilities and ensuing lack of local qualified specialists . Lack of medical services can lead to absence of effective family planning measures that in their turn lead to overpopulation and then to poverty as the national GDP struggles to catch up with economic growth Therefore , addressing a set of problems rather than separate issues is the cornerstone for building an effective development program

References

Amin , S (1995 , April . Fifty Years Is Enough ' Monthly Review 46 (11 , 8

Elliott , D . R Harvey , J . T (2000 . Underdevelopment in Jamaica : An Institutionalist Perspective . Journal of Economic Issues , 34 (2 , 393

Frank , A .G (1989 , June . The Development of Underdevelopment . Monthly Review , 41 (2 , 37

Kendall , J (2001 . Circles of Disadvantage : Aboriginal Poverty and Underdevelopment in Canada . American Review of Canadian Studies , 43

Kinsbruner , J (1994 . Independence in Spanish America : Civil Wars Revolutions , and Underdevelopment . Albuquerque : University of New Mexico Press

Labini ,

.S (2001 . Underdevelopment : A Strategy for Reform . Cambridge Cambridge University Press

Salih . M .J (2004 . Douglas H . Johnson , the Root Causes of Sudan 's Civil Wars . Africa , 74 (2 : 304

Taylor , K .S (1978 . Sugar and the Underdevelopment of Northeastern Brazil , 1500-1970 . Gainesville , FL : University Presses of Florida

Taylor , K .S (2001 . Human Society and the Global Economy . Retrieved on March 11 , 2006 , from the Bellevue Community College website at http /online .bcc .ctc .edu /econ100 /ksttext /underdev /catchup .htm

Walton , J (1984 . Reluctant Rebels : Comparative Studies of Revolution and Underdevelopment . New York : Columbia University Press

PAGE

PAGE 1

CAUSES OF UNDERDEVELOPMENT

11 March 2006 ...