4.3.2D - factors influencing development and growth

Question 1

benefit of better education

Answer 1

• Investing in this supply-side policy increases the potential output of the country (shifts the production possibility frontier outwards)
• Higher education/skill levels → higher human capital → increased productivity → higher output → higher income

Question 2

example of human capital investment

Answer 2

asian tigers - south korea, singapore, hong kong and taiwan invested heavikly in primary and secondary education thus improving human capital so they have a productive labour force. Contributing factor of The Four Asian Tigers steadily retaining a high rate of economic growth since the 1960s, (also driven by exports and rapid industrialization)

Question 3

example of education

Answer 3

• Shanghai maths scheme means chinese students are 2 years ahead in terms of maths skills than their british counterparts
• such investment into education has benefitted them in the long term thus they see rapid economic growth

Question 4

Countries with one of the lowest spending on education as a percentage of GDP in 2022

Answer 4

central african republic: 2.1%
chad : 2.5%

Question 5

Benefits of education

Answer 5

• high prod
• more educated people, great potential to get higher paying jobs, incomes rise so SOL rises as they can afford more material goods they want and need. There is choice
• if women are educated, less gender inequality
• health: education on HIV, malaria, sanitation means less transmission, birth education means healthier population

Question 6

Barriers to education

Answer 6

• lack of funding. if you charge a price bc maybe gov needs private sector help to fund education, then it promotes icnome inequality as some people cannot afford it
• underlying problems: many families may believe as soon as they turn a certain age, they need to contribute to income and stop education (13/14) so education stops after primary

Question 7

benefits of infrastructure

Answer 7

• fdi
• access to school/hospital
• access to markets

Question 8

why do education systems in LEDCs hinder economic growth

Answer 8

• access to ed is v limited. quality of ed is also relatively low. (large classes, teacher shortage
• no of years in education is thus v low
• so productivity and quality of workforce is v low
• hinder econ growth as labour is FOP and important to capital light countries such as malawi

Question 9

An abscence of property rights hinder economic growth for two reasons:

Answer 9

1) land-owning farmers are unable to use their land as a collateral so they cannot get loans for investment which could increase efficiency and production. Thus limits profits to be earned

2) biz owner cannot use propety as collateral so cannot get loans to finance investment and expansion is harder. reduced likelihood of talented entrepeneurs creating successful biz so innovation and comp is limited in economy

Question 10

Define property rights

Answer 10

Rights to ownership of an asset such as land or ideas (intellectual property rights).

Question 11

describe abscence of property rights as a barrier to development

Answer 11

• Property rights are where individuals are allowed to own and decide what happens to
  certain resources. A lack of rights mean that individuals and businesses c annot use
  the law to protect their assets, leading to reduced investment. They will be unwilling to buy machinery, build factories or establish brands
• The loss of property rights in Zimbabwe led to economic collapse.Despite a ruling from Zimbabwe’s Supreme Court that the action was illegal, the Mugabe-led government continued with the land takings. These land reforms marked an important turning point for Zimbabwe. It was the first time in its 20-year history that laws regarding property rights were no longer respected or defended.

Question 12

What are non-economics factors influencing growth and development

Answer 12

corruption
geography/climate
conflict/politics

Question 13

Describe other non-economic factors influencing growth and development

Answer 13

● Diseases such as HIV/AIDS and malaria have a negative impact on economic growth.
● Countries with poor climates and geographical terrain may suffer from natural
disasters and it may be difficult for farmers or to set up businesses.
● Many countries suffer from civil wars, for example Syria and Iraq. This causes high
levels of poverty and destroys infrastructure, making it very difficult for the country to
rebuild even after the war has ended.

Question 14

Describe how corruption can be a barrier to development and growth

Answer 14

• corruption is the abuse of entrusted power
• if corruption arises in a country, gov officials are more likely to pursue their own interest rather than that of the public
• this decreases likelihood that infrastructure projects will be completed on time and efficiently
• so infrastructure likely to remain inadequate limiting economic growth

Question 15

evaluate the extent to which corruption is a barrier to growth and developement

Answer 15

• possible for countries with high levels of corruption to experience successful economic development
• e.g china has developed strongly over the past few decades despite performing poorly on CPI

Question 16

example of corruption affecting infrastructure

Answer 16

• romania has high degree of corruption has seen it motoway project called a3 (aimed to connect north and south) being unfinished for a decade partly due to corruption

Question 17

summarise effect of corruption

Answer 17

• High levels of bureaucracy are often linked to corruption and this is costly and time-consuming, deterring new businesses and reducing output of those already established.
• Ghana’s high level of freedom and democracy is one reason why it has been able to develop so quickly.new gov in 1980 prioritised good governance and upholoding democracy in gaham thus it is now world fastest growing economy in 2019

Question 18

political stability affecting development

Answer 18

• if political stability exists, gov is eifficent in allocating resources and meeting needs
• FDI is attracted as less bureaucracy, regulation
• more likely to get AID as they used aid money wisely

Question 19

risks of instability

Answer 19

• loss of infrastructure (water/comms/transport)
• loss of investment

Question 20

how does corruption occur

Answer 20

• inefficent reguation
• legal corruption not enforcing the lae
• highest bidder over efficient producer
• reduce FDI
• bribes

Question 21

example of corruption in turkey

Answer 21

July 2016,
- there was a failed coup d’état in Turkey.
- Turkish president, Erdogan, responded with purges of the military, civil service and private sector.
- Erdogan appoint his son-in-law as treasury and finance minister.
- FDI fell by $5trn.

Question 22

link fall in turkey’s FDI to corruption

Answer 22

The fall in FDI in Turkey demonstrates that political instability can reduce
economic growth and harm the long-term prospects of an economy .
- Besides reduced FDI, political instability can cause people to travel to live in more stable countries.
- This is especially problematic if these workers are high skilled i.e. there is a braindrain. Russia has suffered from a brain drain.

Question 23

impact of wars

Answer 23

• Wars cause death and destruction.
• People are injured and killed which reduces the quality and size of the workforce. Additionally, power networks and other vital infrastructure is damaged which makes
  producing goods and services more difficult.
• This leads to a deterioration in a country’s infrastructure and factors of production.
• The overall effect is negative economic growth. As a result, economic development is
  likely to be reversed causing the quality of life to fall. Syria is an example of a country that
  has suffered from this due to the civil war which began in 2011.