Barriers to Economic Growth and Development

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Jaehee Kim                                                                                                                    LDC Essay 3

Barriers to Economic Growth and Development

Economic growth and development is what every country want for their wealth, but somehow it is quite impossible for some countries (especially LEDC) to gain economic growth and development, since there are many barriers to growth and development that hold back developing countries. Common examples of the barriers are Poverty cycle, Institutional and Political factors and International financial barriers. These are basically the barriers that act as a hindrance to economic growth, economic development and sometimes both.  

Many poor countries in Africa and Asia are known to have a poor institutional and political system and through this they are facing a variety of barriers to growth. One of the important barriers to institutional barriers is ‘Lack of infrastructure’1. It is known that most developing countries are lacking infrastructure even though it is important to economic growth. Infrastructure consists of the vital facilities and services such as good water systems, roads, sewage treatment, telecommunications, airports etc… The dearth of any of these facilities mostly harms the process to achieve economic growth. For example if the road conditions are bad it is obvious that the goods cannot be transported from one country to another, also if the communication systems are poor or does not even exist, then the ability to organize economic activity is seriously limited. In Mali the country only has a total 15,100 kilometers of roads of which only 1,827 kilometers are paved and also the telecommunication system is known to be very poor (only 170,000 land lines existed in 1997 and in 1995 there was no communication system for mobile phones). With this system there is no way that Mali will have a huge economic growth for a while.  

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Limited infrastructure also hampers development prospects. For example when transportation and road systems are poor many people would not be able to gain education.  

A next key barrier to growth and development is international financial barriers and one of the major problems to growth and development in developing countries is ‘Indebtedness’ in other words it is the amount of debt repayments the LEDC countries have to make on money that was borrowed in the past. In general many commercial banks do not lend money to most of the developing nations but somehow the banks have loaned large ...

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