In this fast economically growing world and in this time of mass-consumption many countries are still struggling with poverty and underdevelopment. Many of the economists and intellectuals believe that countries are poor because they don’t have proper economic plans. Poor countries have bad governance, corruption and social instability which lead to poverty and underdevelopment. According to these intellectuals it is the poor countries that are responsible for their bad economic and social condition. These poor countries should ensure democracy and rule of law and should have better economic plans to achieve development. On the other hand the dependency theorists such as Gunder and others say that the poverty and underdevelopment of poor countries is due to the international trade laws, international division of labour and it is due to the policies by international institutions which cause development of underdevelopment. Dependency theory says that that international system is not allowing the poor countries to grow and be economically better-off, this international system of central capital and wealth is exploitative because this system gives raise to the dominant and dependent countries. Dependency theory gives three main hypothesis about why some countries are poor than others. Firstly it says that the international division of labour is a cause for some countries to be remained poor because in international market rich countries take raw material from poor countries on low price and sell them finished products for high cost which leads to more poverty and develops underdevelopment. Secondly, the class distinction in all countries is cause of poverty and distribution of unequal wealth among people. Class distinction means in every country there are political and economical elites and these elites of all countries have a good understanding with each other and they make such policies that they can maintain their power and remain in high position. Thirdly, global capitalism where the multi-corporations, international institutes, banks and all other economic plans serve for the interest of the elite class and core countries whereas poor or peripheral countries left out from international economic plans. In conclusion it is the global market and international policies which are the main reason behind the poverty of poor countries and the underdevelopment of these peripheral countries. Dependency theory claims that global division of labour and international market is cause of development of underdevelopment.