The primary causes of underdevelopment have a strong relationship that they together form a circle which is vicious. This is called: “Vicious circle of poverty”. There are many different opinions about the so-called “vicious circle of poverty”. Many economists have their opinions about this topic. One of them is Ranger Nurkse.
It proposes that the growth model as seen in China with rising levels of per capita income came at the cost of future generational disparity. The trend in the economic development was to more from primary to secondary and then to tertiary sector that primarily comprises of services. This model misses on the quality of service being provided and who is the provider? Stiglitz proposes that there should be a shift from production being a measure of development to well being being a measure. There are two components of well being- material and qualitative well being.
The research, in its first part, sought to explain, briefly, the Latin American developmentist thinking and how it behaved and evolved during the twentieth century, reaching the so-called neodevelopmentism. This one, with its two aspects, tries to present a clear proposal capable of overcoming the perverse arrangement present in the countries of the region among weak political institutions, large transnational economic groups and expressive influence of the central economies. The theoretical structure of neodevelopmentism is still under construction. However, it can be said that some important points of the theoretical framework are already with well-founded studies, such as the exchange rate and interest issues – significant studies done by precursors and post-Keynesians; and the improvement of the insertion of workers in the capital-labor relationship – a highlight given by the Social-developmentists. The significant observance of the macroeconomic instability given by the New-developmentists makes this the most well-structured field of this new theory.
Research Question: Does the current Economic Globalization and Interdependence process help or hinder the development of all nations? Theory/Hypothesis/Abstract: Economic globalization is reinforced by the idea that states which integrate with the international economic exchange system will become a more progressive and modernized as a consequence. However this paper will argue that this general perception about development does not take into account that globalization may in fact keep poorer nations weak for the purpose of exploitation. There is a need for the current approach to be adjusted. The international division of labour, class distinction, and the domination of liberal economic theory under the current approach to globalization all
The systemic fracturing of existing social organisation and commodification of labour necessitated by the transition to industrialization forms a denial, or deferral of freedoms as defined by the framework of Amartya Sen – particularly economic and social freedoms and sometimes political freedom. As Furtado argued, the distinguishing characteristic of “underdeveloped countries (was) the existence of the pre-capitalist sector” which formed a source of free, and inexpensive, labour. Economic and social policies necessitated by industrialization, compel individuals to participate as a factor inputs alongside land and capital and deprives them of opportunities beyond the market economy. In accordance with Sen’s ‘agent-oriented’ framework, the ‘systematic social deprivation’ of the industrial economy limits the ability of “individuals…[to] effectively shape their own destiny and help each other.” Even in the ‘miracle’ models presented by South Korea and Taiwan, the successful development of an industrialized economy depended on the restriction of political
Day by day the number of people in urban areas is increasing. And they are leaving their traditional agricultural sector and by this process urbanization is increasing. The Lewis Theory of Development: One of the best- known early theoretical models of development that emphasized on the structural changes of a primarily subsistence economy was that constructed by Nobel winning economist W. Arthur Lewis in 1950 and then modified and expanded by John Fei and Gustav Ranis (Economic Development; Michael P. Todaro, Stephen C. Smith; Page- 115) This two-sector model was the general theory of development in excessive –labor developing countries and still it is being used for studying the growth in developing countries. In this model, there are two sectors- one is rural subsistence sector and another is urban industrial sector. This model emphasizes on the labor migration and also on the output growth and employment in the industrial sector.
According to Matthews (2004), post-development theorists had a different view of development as being obsolete and that it did more harm than good as Piertese (2000) quoted Latouche (1993) as referring to development as westernization. Development has been and still is the Westernisation of the world (Latouche, 1993) – imposing western lifestyles. This Prosser (2010) believes is the hidden agenda of development from the onset. The problem with development is that it is external, based on the model
Modernization theory believes that capitalist or investments from developed countries are the solution towards the poverty. Therefore, the encouraged of capitalist will make these poor countries become an industrialization country. Industrialization are refer to the structural change that backward countries experience in their development process from an agriculture society to an industrial economy, with the profound changes in the society that this entails (Kuznets,1973). According to Timmer and Szirmai (2000), it is associated with higher productivity growth and per capita income, described as a “structural bonus”. Based on this, capitalism is the best way to raise the well-being of the poor countries.
The question arises that what is the fundamental cause of underdevelopment in Africa? This has been a research topic in Africa from the past few years. It has been difficult to identify exactly the cause for the underdevelopment of Africa, but the four strands of thoughts stand out. This is mostly specific to South Africa and Nigeria. The economy of Nigeria has been in dire strait for many years; therefore, Nigeria and South Africa was chosen specifically for this research.
However, most of the development planners put their emphasis more on economic development as elaborated by Leys (2005). The work elaborates the influences of Economic Aspects of Development by Keynes and Marshall, development criticism of Gunnar Myrdal, Rostow’s Stages of Growth, dependency theory by Karl Marx to the neoliberal approach of development. Each of those approaches has its historical context of their influences. Thus, He underlined the importance of putting correct assumption in the implementation of the particular development