Toward a comparative study of dependency and economic development: measurement and analysis

In the investigation of the relationship between dependency and the physical quality of life (PQLI) in LDCs, it is possible that dependency may prove to be associated with lower PQLI, but not be a factor which perpetuates low PQLI. In other words, an observed association between dependency and low PQLI may very well be spurious, similar to the association between individual height and the height of siblings. Clearly, tall persons tend to have tall siblings, but the association is not causal and the reason for the relationship can be discovered elsewhere. To establish the direction of the causal arrow in the dependency/PQLI relationship, it is necessary to investigate the relationship between dependency and the growth or improvement of PQLI (Quality Improvement). If dependency proves to be associated with slower Quality Improvement, then the logical conclusion is that dependency is a phenomenon which perpetuates the lower QLI with which it is associated. If dependency is not related to slower Quality Improvement, then the reverse is logically correct, and dependency does not perpetuate or cause lower PQLI, but should then be viewed merely as a characteristic of states with lower PQLI; the causes of which are to be found elsewhere.

As will be shown in this study, another omission in the empirical studies of dependency/inequality relationships is the failure to control for regime type. Abbas Pourgerami's (1991) empirical results suggest that democracy enjoys a complementary relationship with economic and political freedom, and, conversely, authoritarian regimes are more likely to "lead to situations in which some elite units enjoy progress and modernity, while the majority remain socio-economically impoverished and politically repressed" (Pourgerami, 1991, p. 136). In other words, inequality and PQLI in LDCs may be related to the internal factor of regime type as opposed to extemal dependency factors. Consequently, one would expect inequality to be less severe in democracies due to the ability of citizens to make demands on government, an ability which may exist to a lesser degree in authoritarian states.