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Dependency Theory: Quest for Development in Underdeveloped Countries

Quest for development for under develop country mentions the identification of future periphery of development specially focused on globalization. Development is a comprehensive term which is related to the social, economical, technological, political, cultural & other relevant issues. To understand the development of the under develop country the political, military & economic relationship study is also essential. The dependency theory is related to development. The dependency relation within the humanity has the impact to identify the mission of undeveloped countries. Poverty Reduction, Education, health, disaster, and environment will be more priorities issue to ensure the sustainable development. Measurement of development is also become very crucial issue. Result base measurement can help to understand the development itself as well as the complete situation.

Development is a complex issue, with many different and sometimes contentious definitions. A basic perspective equates development with economic growth. The United Nations Development Programme uses a more detailed definition- according to them development is 'to lead long and healthy lives, to be knowledgeable, to have access to the resources needed for a decent standard of living and to be able to participate in the life of the community.' Development means a desirable change of existing situation encompassing different dimensions. (Rahman, 2010) (Rahman, A K M Motin, (2010), Poverty, Poverty Alleviation & Development, the Linkage, NGO and Development Myth & Reality, AH Development Publishing House, 143 New market Dhaka, Bangladesh, P-24.) Achieving human development is linked to a third perspective of development which views it as freeing people from obstacles that affect their ability to develop their own lives and communities. Development, therefore, is empowerment: it is about local people taking control of their own lives, expressing their own demands and finding their own solutions to their problems Adam Smiths Wealth of Nations (1776), Learning about development can help us understand more about the causes of and solutions to these problems and can help us be better informed volunteers, addressing not just the superficial poverty related issues but the deeper rooted causes as well.

Dependency Theory: Quest for Development in Underdeveloped Countries

Dimensions of entire development in underdeveloped countries

To address the entire development in underdeveloped countries there is no alternative to find out the root cause of poverty. The following issues based specific development also helps to address eradicate poverty in underdeveloped countries. The focal point and Specific Development activities

Food Security:
Ensure food security through raising agriculture production with the help of environmental friendly updated & effective new technology.

Initiate women friendly new & innovative income generating activities.(SME,s). Initiate gender focused environmental friendly agro processing center.

Human Rights:
Aware community about Right especially on Human & fundamental right. Influence Government to initiate/develop pro poor policy. Ensure right from the public service delivery institute. Initiative taken to ensure service from the existing policy. Develop a need based qualitative formal & non formal education mechanism among the poor community. Empower women for specially focused on discussion making process.

Develop/update & implement education policy to achieve the goal of Education for all.

Health :
Review the existing Guidelines/Curriculums especially adult literacy curriculum & ensure quality education.

Climate Change:
The National Adaptation Program of Action (NAPA) 2005 prepared by Bangladesh Government. Poverty reduction, livelihood security and gender perspective are given the highest priority.

Dependency Theory: Quest for Development in Underdeveloped Countries

Employment Creation:
Create diversified employment specially focused on ultra poor community. Achieve MDG Goal/PRSP target: MDG & PRSP focused program initiates & implement accordingly.

Basic Concept of dependency theory

Dependency theory is the body of theories by various intellectuals, both from the Third World and the First World, that suggest that the wealthy nations of the world need a peripheral group of poorer states in order to remain wealthy. Dependency theory states that the poverty of the countries in the periphery is not because they are not integrated into the world system, but because of how they are integrated into the system. These poor nations provide natural resources, cheap labor, a destination for obsolete technology, and markets to the wealthy nations, without which they could not have the standard of living they enjoy. First world nations actively, but not necessarily consciously, perpetuate a state of dependency through various policies and initiatives. This state of dependency is multifaceted, involving economics, media control, politics, banking and finance, education, sport and all aspects of human resource development. Any attempt by the dependent nations to resist the influences of dependency could result in economic sanctions and/or military invasion and control. This is rare, however, and dependency is enforced far more by the wealthy nations setting the rules of international trade and commerce. Dependency theory first emerged in the 1950s, advocated by Raul Prebisch whose research found that the wealth of poor nations tended to decrease when the wealth of rich nations increased. The theory quickly divided into diverse schools. Some, most notably Andre Gunder Frank, adapted it to Marxism. "Standard" dependency theory differs sharply from Marxism, however, arguing against internationalism and any hope of progress in less developed nations towards industrialization and a liberating revolution. Former Brazilian President Fernando Henrique Cardoso wrote extensively on dependency theory while in political exile. The American sociologist Immanuel Wallerstein refined the Marxist aspect of the theory, and called it the "world system." According to Brazilian social scientist, Theotonio Dos Santos, dependence means a situation in which certain countries economies are conditioned by the development & expansion of another to which the former is subject. He goes on to further clarify that the interdependence of two or more economies, and consequently world trade, assumes the form of dependence when dominant countries can create dependency

Dependency Theory: Quest for Development in Underdeveloped Countries

only as a reflection of that expansion, which can have a negative effect on the subordinates immediate economy. Dependency theory 2.Irogbe, Kema "GLOBALIZATION AND THE DEVELOPMENT OF UNDERDEVELOPMENT OF THE THIRD WORLD." Journal of Third World Studies 22.1 (2005): 41-68. Academic Search Complete. EBSCO. Web. 17 Oct. 2009.

Dependency relations & the social structure of underdevelopment

Dependency relations have also shaped the social structure of underdevelopment. When the imperialist powers could no longer hold on to power in the formerly colonized territories [due to armed struggle] they were forced to surrender power. The imperialists, in some cases, made sure that they left the reins of power in "good hands" They handed power over to their internal collaborators. They did not hesitate to create and finance political parties in opposition to real nationalist ones; and they also rigged elections and used various other means to make sure that they handed over to those who would continue with the colonial policies in the nominally independent countries. Thus, a crucial problem of underdevelopment is that in this process of dependency there is a convergence of interest between the local or internal bourgeois and the external capitalist oligarchies. The internal compradors greatly benefit from their dependency situation and they are unlikely to sever such a lucrative relationship unless they are forced to do so. Dependency means, then, that the development alternatives open to the dependent nation are defined and limited by its integration into and functions within the world market. This limitation of alternatives differs from limitations in the dominant nations in so far as the functioning of the basic decisions in the world market....are determined by the dominant nations. Thus the dependent nations must make choices in a situation in which they do not set the terms or parameters of choice. The international system or world market upon which the underdeveloped countries depend implies a structure that is characterized by institutions, classes, and power arrangements.

Development in relations with Political, Military and economic

Because of the unequal political, military, and economic relationships between a dependent economy and the dominant external economy, the structure of the former is shaped as much or more by the requirements of the external economy as by its own

Dependency Theory: Quest for Development in Underdeveloped Countries

domestic needs. The domestic political economy is not only shaped by the interaction with a more powerful external economy, but is also shaped by the process. Indeed, the economies of the dependence would be impossible to maintain without the existence and the support of the external factors.

Foreign factors of underdeveloped country

Foreign factors are seen not as external but as intrinsic to the system, with manifold and sometimes hidden or subtle political, financial, economic, technical and cultural effects inside the underdeveloped country... Thus, the concept of "dependencia" links the postwar evolution of capitalism internationally to the discriminatory nature of the local process of development, as we know it. Access to the means and benefits of development is selective rather than spreading them. The process tends to ensure selfreinforcing accumulation of the privilege for special groups as well as the continued existence of a marginal class.

Economic growth, the unexplained residual, and education

World economic history records dramatic changes in living standards over the past few centuries due to unprecedented and sustained technological and organizational change. (The Quest for Development, 2004) It is a truism that the sustained increases in average incomes in industrialized countries have given the majority of households in those countries standards of living reserved in earlier centuries for only the wealthiest individuals. Equally striking, however, is the unevenness of the distribution of changes in income levels worldwide. Already, in 1776, Adam Smith could write that in a civilized and thriving country the accommodation of prince does not always so much exceed that of an industrious and frugal peasant, as the accommodation of the latter exceeds that of many an African king, the absolute master of the lives and liberties of ten thousand naked savages. As the industrial revolution that was only beginning in Smiths time deepened and gradually spread, the gap between the worlds richest and poorest nations widened.

The role of social capability in underdeveloped country

The discussion to this point suggests that there are good reasons to believe that the social and political environment of a country plays an important role in determining its rate of economic growth. However, including factors like the strength of the rule of law,

Dependency Theory: Quest for Development in Underdeveloped Countries

level of political stability, trust, and ethnic homogeneity as separate and exogenous elements in a model of economic growth is in some respects unsatisfying. Temple and Johnson (1998) take up Abramovitzs idea of social capability and attempt to test it more formally. To proxy for social capability, they use an index which Irma Adelman and Cynthia Morris (1967) constructed in an effort to study the economic and non-economic forces at work during the process of development. To gain quantitative insight into the relationship of these factors with the level and pace of economic development, they defined 41 indicators of socio-political and economic organization and development. Of these 41, twenty-four were not purely economic. With these twenty-four variables they performed a factor analysis, a statistical procedure for simplifying a large set of data and discovering its underlying regularities. They constructed four factorsof which the first one explained as much as 53% of the variation in per capita GNP in 1961. In this factor the set of variables which had the highest loadings (i.e. the most explanatory power) were twelve which could be interpreted to represent the processes of changes in attitudes and institutions associated with the breakdown of traditional social organizations (p. 153): (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) Size of the traditional agricultural sector; Extent of dualism; Extent of urbanization; Character of basic social organization; Importance of indigenous middle class; Extent of social mobility; Extent of literacy; Extent of mass communications; Degree of cultural and ethnic homogeneity; Crude fertility rate; Degree of national integration and sense of national unity; and Degree of modernization of outlook.

All 24 variables were used to construct each factor. However the weight or loading of each variable differs across the factors. Defined as the fraction of the population engaged in self-sufficient subsistence agriculture. Countries were ranked on a scale with one pole being the largely agrarian society having an extremely small exchange

Dependency Theory: Quest for Development in Underdeveloped Countries

sector and the other pole being the incipient stage of economic maturity in which continuous interaction between modern and non modern sectors is a pervasive phenomenon (p. 23). Based on a definition and data from the Urban Land Institute. This is a purely qualitative indicator with countries divided into three groups based on whether the principal form of social organization as of about 1960 was the immediate family group, the extended family (or clan), or the tribe. Based on (a) Statistical estimates of the importance of selected middle-class occupations, together with (b) Qualitative information concerning the comparative weight of indigenous and expatriate elements in the middle class. Social mobility is assumed to be signified by broad access to educational attainment, importance of the indigenous middle class, and absence of prohibitive cultural and ethnic barriers.

Relationship between population density and recent economic growth in development countries
A positive relationship between population density and recent economic growth has also been found in other studies, including Kelley and Schmidt (1995), who found a robust positive relationship with growth when controlling for other demographic variables and initial per capita income in both panel and cross-sectional estimates covering 89 countries in the 1960s, 1970s, and 1980s. Gallup, Sachs and Mellinger (1999) found a significant positive relationship between growth and population density in coastal areas, but the opposite relationship for non-coastal areas. Both papers attribute the positive effects to Smithian factors; factors which Gallup et al. suggested are properly activated only in regions with access to international trade. The conceptualization of social capability as a function of a societys pre-modern experience offers an integrative framework potentially capable of encompassing a large number of the non-economic influences on growth discussed earlier. Thus, measures of institutional quality and political stability may be related to Abramovitzs capacity to operate large-scale organizations, which in turn may be influenced by preindustrial experience. Ethnic heterogeneity, emphasized by Easterly and Levine among others, is to a substantial degree a function of the relationship between the size of the nation and the size of pre-modern socio.

Dependency Theory: Quest for Development in Underdeveloped Countries

Other fundamental concern of dependency theory

Another fundamental concern of the dependency theory revolves around the notion that the underdeveloped countries are referred to, by many, as "developing" countries as if to say their development is evolutionary. The now developed (center) countries have never had the same historical experience compared to that of the impoverished countries of the world. Whereas the underdeveloped countries have experienced the phenomena of slavery and colonialism, it is not the case with the developed countries. The argument is that historical situations of dependency have conditioned contemporary underdevelopment in Africa, Asia and Latin America. Thus, underdevelopment is not an original state as some apologists would have us believe.

Development review of colonial Nations

During the colonial era, Africa, Latin America and Asia as well as other colonized territories in the world became oriented to the export of primary products (principally agricultural), under the control of metropolitan capital, and constituted as markets for imported manufactures from the same metropolitan countries. Foreign capital came in to construct social overheads - transportation facilities and utilities that would enhance the exploitation of the people and their natural resources, and for the maintenance of law and order. With their economic and military power, Europe (later joined by the United States) successfully controlled the underdeveloped countries for their material benefits. Today, governments of the underdeveloped countries and their entrepreneurs have no control over international markets for primary products, the prices of which fluctuate and quite often are manipulated by the rich and powerful nations. Such fluctuations almost always result in unfavorable terms of trade in relation to imports.

Development Measure
At the low-intensity end of the pre-modern development continuum, the largest sociopolitical units were tribes likely to have distinct ethnic identities and languages. For an exogenously given size of nation state (e.g., the nations created by the colonial powers in Africa), there would thus be more ethnic heterogeneity the lower is PID. The interaction between the colonial experience and pre-colonial development is discussed at greater length in Putterman (2000). The effect of the colonial experience features prominently in studies by Acemoglu, Johnson and Robinson (2001, 2002). Two respects in which these measures are imperfect or incomplete are:

Dependency Theory: Quest for Development in Underdeveloped Countries

(1) the population densities of the places where people actually live, and the degree to which those places have been able to interact, may be more important than the ratio of population to total land, which can include vast stretches of uninhabited land; (2) The measures do not directly account for the relative importance of pastoralists, nomads, and foragers in the recent pre-modern society. During 196095, and one that is robust to the inclusion of numerous control variables, including a set of region dummies. 1960 population density and the state antiquity index are each highly significant when included in the same regression, implying that each captures a somewhat different dimension of the countries initial conditions for modern growth. In subsequent work, Chanda and Putterman (forthcoming) find that a similar index that considers state experience up to the year 1500 C.E. only is an equally strong predictor of 196095 growth rates, both in full world samples and in samples including present-day developing countries only. The state antiquity index gives more weight to indigenous governments and to governments ruling more of the present-day territory of a country, and it weighs more heavily more recent experience by discounting the past (the main version explored applies a 5% discount rate per 50 year period). Details on and a revised version of the state antiquity index can be found at index.html. The correlation of the statehist index used by Bockstette et al. (2002) with the social development index is a high 0.447 when Latin American countries are excluded, but the two variables are essentially uncorrelated when those countries are included. A further difference is that the initial GDP and investment ratio variables are included in log form in MRW but in level form in Burkett et al., which follows Barro (1991) and others. However, our tests show that it is the definition of the GDP variable, not this functional form that drives the difference in results with respect to the PID and social development variables.

Education & Development of underdeveloped world

Formal education is surely one of the requirements for closing the gap in developmental potential. However, a look at the available data shows, for instance, that sub-Saharan African countries have lagged decidedly behind East Asia and the Americas in formal education at all levels throughout the period 196090, and that this is projected to remain the case well into this century. Sub-Saharan education levels in 1990 were in several respects still behind those attained by East Asia in 1940 and the Americas in the 1950s. Sub-Saharan countries also lagged far behind the other two regions in such

Dependency Theory: Quest for Development in Underdeveloped Countries

professional training areas as law and engineering even when programs similar to a bachelors level or below are included. Recent trends as reported by UNESCO suggest that the gap is on the way to closing in a few categories only. Neither social nor technological capabilities flow across international boundaries in the frictionless fashion sometimes postulated, not only because of differences in command of formal knowledge, but also because in a world of bounded rationality, culture, attitudes, and routine mediate the flow of ideas. Greater emphasis on development in some of the broader senses touched upon above may therefore bear as much fruit, in the long run, as will the standard policy These and other conclusions and evidence are presented in Chanda and Putterman, 1998. An explanation of why the impact of education on growth has been difficult to measure may lie in the way in which we model that impact. One can think of human capitals role as one that facilitates the development of capabilities, which is quite different from mechanically entering human capital into a production function.

Good governance, human rights and development

The interconnection between good governance, human rights and sustainable development has been made directly or indirectly by the international community in a number of declarations and other global conference documents In the Millennium Declaration, world leaders affirmed their commitment to promote democracy and strengthen the rule of law as well as to respect internationally recognized human rights and fundamental freedoms, including the right to development.

Planning and Execution of Development Program

In developing countries like Bangladesh, initiatives for balanced development of the different parts of the country should come from the government. Moreover, for obvious reasons, the government has to shoulder the major responsibility with respect to economic and social sector development. But it has been observed that, in many cases, development programs are undertaken and executed to serve the narrow party interest of the political party in power at the expense of the national interest. The other phenomenon that is very much in existence in Bangladesh is that the people who are associated with the ruling party are awarded with various contracts relating to the execution of the development programs. Such practices breed corruption and the quality of the execution of the development programs also suffers. Sometimes, a nexus is developed between the political parties, government executing agencies and the

Dependency Theory: Quest for Development in Underdeveloped Countries

implementers/contractors that results in waste and unnecessary cost escalation of development projects. But the concept of neutral governance with respect to planning and execution of the development programs suggests that national, not narrow party and or other interests should come into prominence in the planning and execution of the development programs.

Women & Development:

It is clear from many studies that women are not always viewed as agents for development in development programmes, even though there is a marked change in gender policies and gender development objectives of the government. The issue of women's development remains greatly welfare-oriented and the national budget of Bangladesh targets only poor and distressed women who have little potential for undertaking business venture. The planners often identify women as poor, distressed and destitute when they take up women's development issues. Women issues should be treated with care and on priority basis. Only then can women get their due legal and professional protection. ( Article_Emerging women entrepreneurs in SMEs Professor Masuda M. Rashid Chowdhury)

Dependency infarct a result of integrated of different complicated variables. The advocate of dependency views the phenomena of development and under development form the point of world system perspective. According to the capitalist development in the central countries has resulting effect of under development in periphery countries. A considerable portion of cross-country differences in economic growth performance appears to be attributable to differences in institutional and social variables. This paper has centered on the suggestion that these variables may themselves be summarized under the heading of social capability or of a societal capacity for growth, and on the idea that this capacity may in its own turn to an important degree be a function of preindustrial history. The proximate causes are aspects of each societys stock of broad human capital that position them differentially to embark on modern growth. Although our evidence


Dependency Theory: Quest for Development in Underdeveloped Countries

suggests that legacies of past centuries have strongly influenced the human capital bases inherited by countries in the century now ending, the head-start on modernization enjoyed by some societies need not be permanently decisive. Particular histories may have facilitated the modernization of some societies more than others in the past century, but the possibility for social modernization is in principle available to all. Indeed, some of the more historically disadvantaged countries, for instance in sub-Saharan Africa, may have made considerable progress in closing the gap in pre-conditions for development during the same post-War decades in which their per capita GDP growth lagged so dramatically. If enough such progress has been made, then the negative implication that slow post-War growth may have been foreordained may be less important than the optimistic implication that accelerated growth is now a real possibility. But a careful assessment of that progress, using direct measurements of literacy, skills, and so on, rather than population density is called for before definite conclusions can be reached.


Dependency Theory: Quest for Development in Underdeveloped Countries

Democracy and State Capacity:Complements or Substitutes? Jonathan K. Hanson,Syracuse University,Version: January 2010 ECONOMIC DEVELOPMENT IN A CHANGING GLOBALISED ECONOMY: THE CASE OF DEVELOPING COUNTRIES Mozammel Huq,Department of Economics, University of Strathclyde Early Starts, Reversals and Catchup in The Process of Economic Development Areendam Chanda Louis Putterman North Carolina State University Brown University John Luke Gallup. A New System for Formatting Estimation Tables, Submitted to Stata Journal, September, 2010 The Quest for Development, Areendam Chanda & Louis Putterman, WORLD ECONOMICS Vol. 5 No. 2 AprilJune 2004 Smith, A (1776)/(1982), An Inquiry into the Nature and Causes of the Wealth of Nations.Harmondswoth: Penguin Books (Glasgow, Scotland, G4 0LN. E-mail: <>) Social capital and growth in European regions:an empirical test CentER, Tilburg University, Warandelaan 2, P.O. Box 90153, 5000 LE Tilburg, The Netherlands Received in revised form 24 June 2004; Available online 21 November 2004