Myrdal's well-known position on the theory of social change and development is that of circular causation and cumulative change. He suspects the validity of constructing universal evolutionary stages of growth. These, according to him, tend to be teleological and often have conservative ideologies latent in them.

The crucial factor in development is an upward movement of the social system as a whole, with all its component conditions. These conditions for the South Asian countries, as described by Myrdal, are output and income, conditions of production, levels of living, attitudes towards life and work, institutions, and policies. He assumes a causal relationship between these conditions, so that an upward or downward movement in one would cause a cumulative movement of similar nature in the others too.

The modernization process in India and other South Asian countries, according to Myrdal, is heading fast towards a climax, and the time for reasonable choice for them is limited. The opportunity for a gradualist approach is also over. Myrdal thinks it is not more difficult, but easier, to cause a big change rapidly than a small change gradually. The prime areas for such big, rapid changes are the social and institutional conditions in Indian society, for these hold the keys to the mobilization of all other conditions of development.