THE CONCEPT OF :

UNDERDEVELOPMENT (GUNNAR MYRDAL)

THEORY AND PRACTICE OF PUBLIC
ADMINISTRATION
ANNA MARIEL GARCIA- QUIMEN
Student

Ms. PRESY A. ANTONIO, MMPM, CSEE

Professor
CONCEPT OF UNDER DEVELOPMENT
MEANING OF UNDERDEVELOPED COUNTRIES

“We have had some difficulty in interpreting the term ‘underdeveloped

countries. We use it to mean countries in which per capita real income is
low when compared with the per capita real income of the United States of
America, Canada, Australia and Western Europe. In this sense, an adequate
synonym would be poor countries - United Nations

“An underdeveloped country is that country in which there is a constellation

of numerous undesirable conditions of work and life; output, income and
levels of living are low; many modes of production, attitude and behavior
patterns are disadvantageous, and there are unfavorable institutions. There
is a general causal relationship among all these conditions.” - Prof. Gunnar
Myrdal
MEANING OF UNDERDEVELOPED COUNTRIES

“A country which has good potential prospects for using more capital or
more labor or more available natural resources or all of these, to support
its present population on higher level of living or if its per capita income
level is already fairly high, to support a large population on a not lower
level of living.” - Prof. Jacob Viner
MEANING OF UNDERDEVELOPED COUNTRIES

“An underdeveloped economy is an economy in which the available stock

of capital goods is not sufficient to employ the available labor force on the
basis of modern techniques of production. - Dr. Oscar Lange

Compared with the advanced countries are under-equipped with capital in

relation to their population and natural resources”. - Ragner Nurkse
CLASSIFICATION OF DEFINITIONS OF UNDERDEVELOPED COUNTRIES
Underdevelopment can be broadly classified into—
• (i) Poverty And Low Income Based, - the definitions of Eugene Staley,
Samuelson, Bauer and Yamey, Todaro, Gunnar Myrdal and United
Nations are poverty and low income based
• (ii) Under-utilized Resource Based - the definitions of Jacob Viner and
Planning Commission are under-utilized resources based
• (iii) Capital Deficiency Based - the definitions of Ragnar Nurkse, Simon
Kuznets and Oscar Lange are capital deficiency based
• (iv) Poor Human Development Index – for economists like Amartya Sen,
Jean Dreze and others has defined the term underdevelopment on the
basis of poor poor rate of literacy, high infant mortality rate, poor per
capita consumption of electricity, poor level of social welfare, poor
average calorie intake
PROXIMATE CAUSES OF UNDERDEVELOPMENT
(i) Poor per capita income,
(ii) Capital deficiency,
(iii) Unutilized potential for growth,
(iv) Underutilized manpower and natural resources,
(v) Poor base in the socio-economic determinants of development,
(vi) Orthodox, inefficient and traditional techniques of production and
(vii) Poor human development index.
OVERVIEW OF DEVELOPMENT
CONCEPT OF UNDER DEVELOPMENT
GUNNAR MYRDAL
a Swedish Social Democrat sociologist who won the 1974 Nobel
Memorial Prize in Economics, and one of the fathers of the Swedish
welfare state of the 1960s;
A lifelong foe of inequality, and supporter of wealth redistribution;
became obsessed with third-world poverty, which led him to advocate
land reform in South Asia as a prerequisite for eradicating poverty;
views underdevelopment as dynamic and relational concept;
The obstacles to rapid economic development are rooted in the
inefficiency, rigidity and inequality of the established institutions and
attitudes with their economic and social power structures.
 In order to reverse underdevelopment, changes in the social and
institutional structures must be induced. (Myrdal 1970, 1968: 430-435)

CAUSES OF UNDERDEVELOPMENT (Myrdal 1970: 49-56)

 modernization ideals in the third world countries are confines only to
the elite minority in power
Most serious bottle-neck for development – inhibitions on the part of
the elite and obstacles on the part of the masses for the spread of
modernization ideals leading to social stratifications and rigidities in
which social mobilization in favor of under privileged masses becomes
almost impossible
CAUSES OF UNDERDEVELOPMENT (Myrdal 1970: 49-56)
 the extremely low levels of living levels of productivity, and low
income act in a cumulative circular causation process resulting in
underdevelopment

CUMULATIVE CAUSATION THEORY OF ECONOMIC DEVELOPMENT

- the backward region problems creates more problems and
developed region’s auto solution solve all problems
-conveys the ripple effects of changes in an economy- any
change, such as new businesses opening in an area, will cause a
cascade of other changes, and that economic improvement in one area
implies economic decline in other areas.
CAUSES OF UNDERDEVELOPMENT (Myrdal 1970: 49-56)
Can be divided in Two (2) factors:
1. INTERNAL FACTORS -
• Factor endowment (conveys the ripple effects of changes in an
economy. Myrdal stated that any change, such as new businesses
opening in an area, will cause a cascade of other changes, and that
economic improvement in one area implies economic decline in
other areas.
- Climate - Population
- Institutions - Structures
- Attitudes and - Legitimacy of the regime
CAUSES OF UNDERDEVELOPMENT (Myrdal 1970: 49-56)
Myrdal analyzed underdevelopment in the terms of the concept of third
world countries being “SOFT STATES”, where It is comprise of all the types
of social lack of discipline

SOFT STATES - ... all the various types of social indiscipline which manifest
themselves by deficiencies in legislation and, in particular, law observance
and enforcement, a widespread disobedience by public officials and, often,
their collusion with powerful persons and groups ... whose conduct they
should regulate. Within the concept of the soft states belongs also
corruption (Myrdal, (1970), p 208).
People are as they are, not because they are inherently evil-minded
but as a result of long history
CAUSES OF UNDERDEVELOPMENT (Myrdal 1970: 49-56)

Societies in the soft states continued to be of Gemeinschaft type (social

relations between individuals, based on close personal and family ties)
Extensive distribution of subsidies thru discretionary controls –although
aimed to the poorer strata, the benefits always reach the better off strata
first.
All powers are in the hands of the upper elite who can afford egalitarian
laws and policy measures but are in the unchallenged position to prevent
their implementation.
The poor remains poor or becomes poorer while the elite becomes richer,
and the economy becomes stagnant
CAUSES OF UNDERDEVELOPMENT (Myrdal 1970: 49-56)
2. EXTERNAL FACTORS -
- Trade - Aid
- Foreign borrowing - Technology transfers and
- Foreign investment

Failure of the developed nations to enable the stabilization of the prices

of the commodities of the third world, creating wild fluctuations in the
economy
Foreign borrowing s at high rates of interest, leads to serious debt service
burdens
CAUSES OF UNDERDEVELOPMENT (Myrdal 1970: 49-56)
Unimaginative bilateral foreign aid, it is intended to stimulate the
economy of the donor not the receiver
Mechanisms of technology transfer, obsolescent and irrelevant to the
factor proportions of the receiving country
Inability to intelligently negotiate with the transnational corporations,
where the host government officials are not even competent to examine
The energy constraints, cut back of oil production creates unpredictable
increase in its prices
FRAMEWORK OF ANALYSIS (Myrdal 1970: 295-398)

The primary task of the third world nations is to shed their soft states and
for this they have to direct all their energies towards the true mobilization
of the poor masses, the removal of social rigidities (resistant to change)
and the encouragement of social mobility.
1. Agrarian reform – bring rational ownership of lands, having to stick to
agriculture and agricultural policies favouring the small farmers,
tenants and landless labor;
2. Effective population control policies;
3. Quick and effective program of elimination of adult illiteracy, and a
widely distributed and relevant primary and secondary educational
system;
FRAMEWORK OF ANALYSIS (Myrdal 1970: 295-398)

4. Creation of decentralized power systems and the continuation of

participation thru voting system
5. Conscious attempts to raise the living conditions of the poor
providing them the minimum needs;
6. Improvement of the third world ways of legislation and
administration; and
7. Elimination or reduction of corruption.
REFERENCES
• https://timesofindia.indiatimes.com/What-is-the-backwash-
effect/articleshow/3028674.cms
• http://www.economicsdiscussion.net/underdeveloped-countries/underdeveloped-
countries-meaning-and-classification-of-definitions/18975
• https://www.investopedia.com/terms/g/gunnar-myrdal.asp
• Introduction to Public Administration in the Philippines: A Reader, Bautista et. Al,
1993, Underdevelopment in the Third World by V. Krishnaswamy: 185-192.
• https://en.wikipedia.org/