It tells about political economy approach.Political economy refers to a specific way of understanding social and political phenomena whereby, economics and politics are not seen as separate domains. It is premised (a) on a relationship between the two and (b) the assumption that this relationship unfolds in multifarious ways. Having said this, it is important to point out that whereas the concept of political economy points at a relationship, there is no single meaning which can be attributed to the concept. The specific meaning the concept assumes depends on the theoretical, ideological tradition. e.g., liberal or Marxist, within which it is placed, and depending on this positioning, the specific manner in which economics and politics themselves are understood. Interestingly, the appearance of economics and politics as separate domains is itself a modern phenomenon. From the time of Aristotle till the middle ages, the concept of economics as a self-regulating separate sphere was unknown. The word 'economy' signified in Greek 'the art of household management'. As the political evolution in Greece followed the sequence: household- village- citystate, the study of the management of the household came under the study of 'politics', and Aristotle considered economic questions in his Politics. Among the classical political economist, Adam Smith considered political economy as ‗a branch of the science of statesman or legislator‘. As far as the Marxist position is concerned, Marx (1818-1883) himself, generally spoke not of 'political economy' as such but of the ‗critique of political economy‘, where the expression was used mainly with reference to the classical writers. Marx never defined political economy, but Engels did. Political economy, according to the latter, studies ‗the laws governing the production and exchange of the material means of subsistence‘ (Engels, Anti-Duhring). The Soviet economic theorist and historian Issac Illich Rubin suggested the following definition of political economy: ‗Political economy deals with human working activity, not from the standpoint of its technical methods and instruments of labour, but the standpoint of its social form. It deals with production relations which are established among people in the process of production‘. (1928). In this definition, political economy is not the study of prices or scarce resources, it is rather, a study of culture seeking answers to the questions, why the productive forces of society develop within a particular social form, why the machining process unfolds within the context of business enterprise, and why industrialisation takes the form of capitalist development. Political economy, in short, asks how the working activity of people is regulated in a specific, historical form of economy.The theory of modernisation was an attempt by First world scholars to explain the social reality of the ‗new states‘ of the Third world. This theory is based upon separation or dualism.

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POLITICAL ECONOMY APPROACH:
UNDERDEVELOPMENT, DEPENDENCY,
WORLD SYSTEM AND
MODERNIZATION THEORIES IN
COMPARATIVE POLITICS

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THEORY OF UNDERDEVELOPMENT
IT FOCUSES ON TH IDEA THAT CERTAIN . COUNTRIES OR REGIONS FAIL TO ACHIEVE ECONOMIC
DEVELOPMENT AND REMAIN IN STATE OF POVERTY AND BACKWARDNESS.
• ANDREW ARGUED THAT UNDERDEVELOPMENT WAS NOT A NATURAL OR INHERENT
CONDITION, BUT RATHER A RESULT OF HISTORICAL AND STRUCTURAL FACTORS.
• HIS “CAPITALISM AND UNDERDEVELOPMENT IN LATIN AMERICA” , HIGHLIGHTS THE ROLE OF
EXTERNAL FORCES SUCH AS EXTRACTION OF RESOURCES AND UNEQUAL TRADE RELATIONS,
PERPETUATING UNDERDEVELOPMENT.
• WALTER RODNEY'S INFLUENCIAL BOOK , “ HOW EUROPE UNDERDEVELOPED
AFRICA,”SIMILARLY ANALYSED THE HISTORICAL AND ECONOMIC PROCESSES THAT LED TO
AFRICA’S UNDERDEVELOPMENT.
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EXAMPLES:
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1. THE EXPLOITATION OF AFRICA’S NATURAL RESOURCES SUCH AS DIAMONDS, GOLD AND OIL BY EUROPIAN
COLONIZERS DURING SCRAMBLE FOR AFRICA.
2. THE OPERATIONS OF MNCS IN UNDERDEVELOPMENT COUNTRIES WHERE THEY ESTABLISH FACTORIES OR
EXTRACTIVE INDUSTRIES TO TAKE ADVANTAGE OF CHEAP LABOUR OR MINERAL RESOURCES, WHILE THE
MAJORITY OF PROFITS FLOW BACK TO THE COMPANY’S HOME COUNTRY.
3. THE DEBT CRISIS IN SEVERAL LATIN AMERICA COUNTRIES IN 1980S WHERE COUNTRIES LIKE MEXICO, BRAZIL AND
ARGENTINA ACCUMULATED SIGNIFICANT EXTERNAL DEBT , LEADING TO ECONOMIC INSTABILITY AND HINDERED
DEVELOPMENT.
4. THE MIGRATION OF DOCTORS, ENGINEERS AND OTHER HIGHLY SKILLED PROFESSIONALS FROM
UNDERDEVELOPED COUNTRIES IN AFRICA AND ASIA TO DEVELOPED COUNTRIES IN EUROPE OR NORTH AMERICA.

4. DEPENDENCY THEORY
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BUILDING UPON THE THEORY OF UNDERDEVELOPMENT, DEPENDENCY THEORY EMERGED AS A
CRITIQUE OF TRADITIONAL MODERNISATION THEORY, WHICH SUGGESTED THAT
UNDERDEVELOPED COUNTRIES COULD CATCH UP WITH INDUSTRIALISED NATIONS THROUGH
INTERNAL REFORMS.
DEPENDENCY THEORIST SUCH AS RAUL ■ PREBISCH’S CONCEPT OF “DEPENDENCY SYNDROME” &
FERNANDO HENRQUE CARDOSO’S i CONCEPT OF “ASSOCIATED DEPENDENCY” HIGHLIGHTS
DEPENDENCY.

5. EXAMPLES:
1. THE RELIANCE OF MANY AFRICAN COUNTRIES ON THE EXPORTS OF CASH CROPS LIKE COCOA, COFFEE, OR BANANAS
, WHICH ARE SUBJECT TO VOLATILE GLOBAL MARKETS PRICES CAN LEAD TO ECONOMIC INSTABILITY.
2. UNDERDEVELOPED COUNTRIES IMPORTING ADVANCED MACHINERY OR TECHNOLOGY FROM DEVELOPED NATIONS
RATHER THAN DEVELOPING THEIR OWN.
3. THE IMF AND WORLD BANK PROVIDING LOANS TO UNDERDEVELOPED COUNTRIES.
4. THE INFLUENCE OF WESTERN MEDIA AND POPULAR CULTURE ON UNDERDEVELOPED COUNTRIES LEADING TO THE
ADOPTION OF FOREIGN LIFESTYLES, CONSUMERISM, AND EROSION OF
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WORLD SYSTEM.- THEORY
DEVELOPED BY IMMANUEL WALLERESTEIN , WORLD SYSTEM THEORY TEKES A BROADER PERSPECTIVE BY
EXAMINING THE GLOBAL CAPITALIST SYSTEM AS A WHOLE .
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HE ARGUES THAT THE WORLD IS DIVIDED INTO CORE, PERIPHERY AND SEMI PERIPHERY WITHIN THE GLOBAL
ECONOMIC SYSTEM.
• EXAMPLES:
1. THE US, GERMANY AND JAPAN WHICH ARE HOME TO MAJOR FASHION BRANDS AND CORPORATIONS THAT SET GLOBAL
TRENDS, CONTROL MARKETING AND DISTRIBUTION NETWORKS.
2. BANGLADESH, COMBODIA AND ETHIOPIA WHERE LOW LABOR COSTS, LAX LABOR REGULATIONS, AND THE
AVAILABILITY OF CHEAP LABOR ATTRACT MNCS TO ESTABLISH GARMENT FACTORIES.
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7. MODERNISATION.. THEORY ^
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• MODERNISATION THEORY THAT EMERGED IN THE MID 20TH CENTURY SUGGESTS THAT SOCIETIES PROGRESS THROUGH A
SERIES OF STAGES, AND ECONOMIC DEVELOPMENT IS SEEN AS A KEY DRIVER OF SOCIAL AND POLITICAL CHANGE.
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• EXAMPLES:
1. THE INDUSTRIAL REVOLUTION IN BRITAIN DURING LATE 18TH CENTURY, WHICH MARKED A SHIFT FROM AND
AGRARIAN SOCIETY TO AN INDUSTRIALED ONE, WITH THE GROWTH OF FACTORIES, MASS PRODUCTION AND IMPROVED
TRANSPORTATION SYSTEMS.
2. SOUTH KOREA’S TRANSFORMATION FROM AN AGRICULTURAL BASED ECONOMY TO A MAJOR PLAY IN GLOBAL ELECTRONICS AND
AUTOMOBILE INDUSTRIES.
CHINA’S SHIFT FROM Q CENTRALLY PLANNED ECONOMY TO A MORE MARKET-ORIENTED SYSTEM, OPENING UP TO
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FOREIGN INVESTMENT, PROMOTING EXPORTS, AND DEVELOPING SPECIAL ECONOMIC ZONES, LEADING TO RAPID ECONOMIC
GROWTH AND INTEGRATION INTO GLOBAL MARKETS.