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Economic Developement

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Four Elements of Development. 1. Human resources (labour supply, education, discipline) -> healthy labour force. Happy and satisfied people, qualified positive work models. 2. Natural resources (land, minerals, fuels, climate)- 3. Capital formation (machines, factories, loads) 4. Technology (Science, engineering, management, entrepreneurship, "know-how" Poor countries face obstacles in combining these 4 elements Low savings and investment-> low pace of capital accumulations-> low productivity-> low average income-> low savings and investment-> (Vicious circle) Different theories which focus of how poor countries can or may break out of the vicious cycle of poverty 1. ...read more.


Role of the market / State vs. market. Characteristics of LDC's 1. High birth rate 2. high mortality rate 3. low life expectancy 4. low capital to labour ratio 5. primary producers 6. high unemployment/ massive underemployment 7. poorly utilised natural resources 8. low quality of labour force 9. Inadequate social, economical, industrial, infrastructure. 10. poor health care 11. At times social and cultural behaviour act as barriers to development. (Denying women education, denying use of prevention and abortion.) 12. Corruption 13. Civil unrest/ unstable politically- 14. heavy specialization (depending on one or two goods How to develop a nation / attempts to get out of the vicious circle 1. ...read more.


- Most primary production productions are price inelastic. 3. Population policies. - limit growth of population - accept the growth and do something about it ( difficult for a LCD) - awareness that growth does not necessarily increase the standard of living (development) 4. Foreign trade - increase exports to generate foreign currency needed for capital equipment. - interest on loans (which often are impossible to pay down) Motive for aid 1. Political reasons (east/ west) 2. Natural disasters. 3. Humanitarian. 4. Economic reasons (growing market) Forms of Aids 1. Unilateral aid 2. Multilateral aid 3. Tied aid (It has conditions/ requirements connected to it) 4. food aid ...read more.

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