This paper suggests that psychology can contribute to a better understanding of conditions prevailing in "underdeveloped" countries. To do so, however, psychologists must overcome psychology's almost exclusive focus on the individual; and economists, the tendency of their discipline to look at "developing "societies not in terms of their own experience but in terms of the experience of European-type societies. With these shifts, the paper proposes a three-point strategy: (a) "underdevelopment" should be defined not in terms of deficits of wealth and capital accumulation, but in terms of appropriately selected psychological variables (for example, by combining Hirschman's Exit-VoiceLoyalty framework with Bandura's social cognitive theory, deficits of perceived selfefficacy-at individual and collective levels—can provide a potential alternative definition); (b) an ideographic theory of "social helplessness" is then sketched" in the light of historical experience for Pakistan; and (c) the possibility of psychosocial therapeutic (or, policy) interventions are then examined with reference especially to Bandura's work on human agency and Beck's work on treatment of depression. In conclusion, the paper calls for a greater consensus on the paradigm proposed, or extensions of it, before further research takes place.In the animal kingdom, the rule is eat or be eaten. In the human kingdom, define or be defined.T.S. Szasz (1973, p.20) The purpose of studying economics is not to acquire a set of ready made answers to economic questions, but to learn how to avoid being deceived by economists.