Causes of Underdevelopment

HomeFree EssaysEconomicsCauses of UnderdevelopmentBuy Custom Essay
← An Overview of the American EconomyThe Economic, Cultural, and Political History of the Austral and Pacific Realms →

Buy custom Causes of Underdevelopment essay


Underdevelopment is a situation where there is a general negative economic growth in a country or nation over a long period. As a result, a majority of citizens of the underdeveloped countries live in abject poverty, which is often accompanied by lack of adequate social amenities like health and educational facilities, poor housing, food insecurity, and unemployment among others (Mason & Asher 2003). Moreover, these countries heavily depend on foreign aid and have high rates of brain drain. Underdevelopment has been mostly associated with Africa since most countries in Africa are underdeveloped. Underdevelopment is a dominant characteristic in all third world countries. For many years, scholars have been explaining causes of underdevelopment by factors like poverty, lack of natural resources, political instability, and so on. However, some of these causes are, in fact, the consequences of underdevelopment, which often results from issues such as colonialism, inadequate monetary policies imposed by colonizers, and poor management of the country.


Sahn et al. (2001) assert that colonialism is one of the major causes of underdevelopment in the third world countries. Colonialists are mostly blamed by historians and other prominent people like President Dr. Mahmoud Ahmadinejad as the major cause of underdevelopment in these states. Historians explain that colonialists are the main reason to why these states lack natural resources. They are of the opinion that colonialists spend centuries relentlessly exploiting natural resources from these countries. Consequently, the former colonies lack the resources that they can use towards economic development. However, this does not explain why Nigeria has plenty of crude oil and other natural resources and is still underdeveloped. On the other end, the countries like Kenya that have never had many natural resources are also underdeveloped (Leys 2004). All the same, many underdeveloped countries like Romania and Russia were never colonized in the first place. Colonialists might defend themselves by saying that they had provided education, health facilities, and basic infrastructure like roads, schools, railways, and hospitals. However, the education system that they had given to the Africans was of low quality which only allowed them to do manual labor, as is the case with British colonies (Sahn et al. 2001). Railways and roads were the only facilities which sustained the colony’s operation.

Though the French colonialists might claim that they had at least given the Africans an education system of sorts along with some political rights, the education offered was based upon the superiority of the French culture over the colonized. Similarly, the hospital facilities built by the colonialists could not accommodate well to the demands of time. Mason & Asher (2003) assert that the colonialists also failed to adequately train their colonies in certain professions, especially managerial since most senior positions were given to the French who were the dominant group. After they had departed with an advent of independence, the former colonies ended up with a development vacuum without the appropriate educational system in place and the required expertise. Moreover, instead of using up the acquired natural resources on the colonies, colonialists sent them back home, thus the colonies failed to develop due to an unequal distribution of wealth (Cox 1997). Colonialists also placed trade barriers on traders from other countries. Thus, they had monopoly over their colonies denying the colonies opportunities to develop through trading with other countries.

Poor Managerial Skills

The leadership and managerial skill in these countries are the important reasons to why they have been underdeveloped. Though most of these countries may claim to have embraced democracy, the leadership remains a vital condition of its economic fate. The leaders are typically unable to give their states their best of effort. Instead of concentrating on matters of economic development, they have often engaged themselves in useless political endeavors that they have pulled through the parliaments or barred the other legislation that would have been useful in economic development (Lemke 2002). The leaders have been unable to foster policies that would trigger technological development in their countries, which is a main factor in economic development. Additionally the leaders are unable to plan for the future of their nations. All they do is to duplicate policies from foreign nations in desire to please the donors without considering the impacts and demands of such policies. As a result, their projects fail. For instance, these countries may opt to adopt free primary and secondary education in an attempt to please the donors without considering the impacts that such moves will have on tertiary institutions such as overcrowded classes or lack enough opportunities in the job market for the huge number of students recruited into these institutions. As a result, there numerous people who end up unemployed, low standards of living, low levels of income and the entire vicious cycle of poverty (Sahn et al., 2001). Moreover, poor management makes the leader of the state to be unable to plan properly for their population.  Thus, when natural disaster or impediments like droughts or floods strike these states it causes massive destruction of lives because these states are unable to prepare for such calamities. Thus, poor management of these states is majorly responsible for the underdevelopment of these states.

Moreover, in some states, there is political instability as leaders’ greed for control and power sends them into wars and discord. As a result, foreign investors are reluctant to do business in such countries where the citizens are unable to go on with their daily economic activities, since infrastructure and businesses are often destroyed in those wars. This results into destruction of scarce resources and financial losses, which causes lower national incomes apart from scaring the investors.  Moreover, much of public funds are spent on purchasing military equipment rather than investing in profitable economic activities. Most leaders in those states are unable to prevent or reduce the embezzlement of public funds (Leys 2004). Rampant corruption results in most public funds being diverted into private pockets. Thus, when it comes to investing in economic development of the state, there are no adequate funds in the budget. In the underdeveloped states, there is usually a lack of political goodwill in the matters of economic development: redundant bureaucracy and government red tape deter many prospective investors from revitalizing the country’s economy and increasing the per capita income. Thus, they seek opportunities in greener pastures. Therefore, poor management of the state is one undisputable factor that leads to underdevelopment.

Unwanted Monetary Policies

The World Bank, IMF and other developed countries are responsible for underdevelopment in most of the countries in the third world countries. They impose unwanted monetary policies on most third world countries, which results to underdevelopment. These organizations impose rigid legislations on the states that wish to receive financial aid from them and failure to comply to these principles result to revocation of financial aids. These organizations or states offering financial aid or grants believe that their policies will help third world countries to deal with their economic problems thus trigger economic development (Sahn et al., 2001). For instance, the Bretton organizations are extending the structural adjustment programs to the underdeveloped countries across the globe. Thus, the loaner/ donor demands that the third world country bound to receive the loan must adopt these policies. However, this widespread belief that a financial aid program that come with loans can help these countries eradicate poverty fails to consider many factors in the third world countries, thus, staging the failure of such policies from the start. Some of those qualifying must-do policies have a record of success elsewhere in the globe especially in the developed countries. Additionally, various states are placed in different economic and geographic conditions that often make these policies to have mixed effects: either success or failure. Thus, when the financial donors demand that the uniform policies are observed everywhere they give their funds and the policies end up failing, the receivers of the loans are unable to regenerate the funds owed thus accumulate huge debts (Millet & Toussaint 2010). Thus most of these unsuccessful policies and huge financial debt and fines imposed from donor states are the reason to why there is under-development in the third world countries.

Furthermore, the institutions offering these financial aids also deny the receivers of these funds a chance to make independent and economically stable decisions in relation to the superseding economic conditions in individual third world countries (Lemke 2002). Forcing developing countries to adopt particular set of policies because they worked elsewhere denies states the chance to make and implement their own decisions, which would have helped in dealing the economic issues within their countries. Thus, they cause economic failure in these states.  Additionally, the donors are unable to supervise the way these funds are spent or whether the projects are working as scheduled or not. Most of these developing states also lack personnel to oversee the proposed projects while the donors give them funds without any other technical support. The donor hand funds to inexperienced people who are unable run the projects as it is supposed to be done. This results to using funds for unintended purposes, which is same to misusing or misappropriation of funds. Thus, when such programs fail, a whole nation is sunk into liabilities or debts (Leys, 2004). Therefore, the countries sink into debts and use the available resources and funds to repay the huge fines imposed on them instead of dealing with their economic development (Cox 1997). Therefore, like colonialism and poor management of state, unwanted monetary policies play a major role in the underdevelopment of the third world countries.


The causes of underdevelopment vary from country to country as seen in the cases of Nigeria, Romania, and Kenya. However, the three factors must be treated as the major causes of underdevelopment in the modern world. First, the colonial masters are often to blame for the economic difficulties of their former colonies. Second, donors and grant givers should be careful enough in what they are trying to do. They should offer enough technical and supervisory support not to let the funds be misappropriated, as well as be lenient in debt management. And last but not least, the developed countries should help the underdeveloped world leaders in building a better managerial capacity in order to deal the economic issues more efficiently.

Buy custom Causes of Underdevelopment essay

Order Now
Order nowhesitating

Related essays

  1. The Economic, Cultural, and Political History of the Austral and Pacific Realms
  2. Types of Economic Systems
  3. An Overview of the American Economy
  4. Dutch Disease and Resource Curse
Order now