Reasons for Economic Development
There are a number of reasons suggested for why some economies have remained less developed than others.
• An over-dependence on agriculture to provide jobs and incomes.
More people in less developed economies work in farming than in industry and services compared to developed nations. They practice self subsistence farming, and only produce enough for their own consumption. There is very little to live on, and no surplus to sell or trade. In some areas, the land becomes unsuitable for farming and barren over time, as there has been over farming. Lack of rain due to global climate change also limits the growing and production of crops.
• Lack of efficient production
Many less developed countries lack industries and services. Low levels of income provide little incentive for business to set up companies. Workers are not trained or skillful, which makes industry difficult to employ them.
• High population growth
Many underdeveloped countries have rapidly growing population as their birth rates remain high. There is poor family planning and lack of education when it comes to childbirth. This means available goods and services have to be shared among more and more people over time.
• Other factors
An unstable and corrupt government, or civil wars within a nation or between several nations, dips into the nation’s capital fund, disallowing the nation to invest in economic development.
• GDP per capita
Gross Domestic Product (GDP), or average income per person, is the common method of comparative measure of development. Developed nations tend to have a high GDP per capita. However, measuring a nation’s development based on their GDP has its drawbacks. It is a narrow measure of development or welfare in a country, as it has no indication of what is bought with the income, or how the income is distributed throughout the population.
• Poverty Indicators
A better measure on level of poverty in a country is the proportion of people living on low incomes. Other indicators include malnutrition levels, number of underweight children, levels of unemployment, as well as number of people living in slums.
• Life Expectancy at...