What Are the Causes of Underdevelopment?

Introduction

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 paper 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. 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.

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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, p. 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, p. 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, p. 179). Express inequities between different groups inside one nation are one of the most serious obstacles to successful development of countries.

Inequities between different groups inside one nation

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, p.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, p. 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.

Economic inequality belong to the industrialised world

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, p. 98).

Conclusion

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).