4.9 - Barriers to economic development Flashcards
(14 cards)
Nature of economic barriers for ELDC
They are focused on the supply side of the economy
Dependance on primary sector
- Suply and demand are inelastic; unstable
- commodities are necessities so demand doesnt necessarily grow with world incomes
- overspecialisation bad
Rate of investment
- cant develop economically
- businesses usually dont invest due to risk
- extensive regulation in some cases
- ineffective tax systems
Lack of investment and infrastrucutre
cant develop
Indebtedness and capital flight
debt crisis + capital flight bad
levels of human capital
- they kinda ass in ledc💀🥀
- theyre too young
- low primary and secondary education
- no labour mobility
- bad healthcare
Access to international markets
others countries use protectionism
Informal economy
The informal economy in an ELDC is generally made up of many small operations that work outside the normal legal framework of business.
- no tax
- not scaled to develop economy
- skilled workers taken away
- illegal activity waste police resources
- negative externelities
landlocked
no ports
no fishing
transport through other countries
climate
too hot, volatile weather causes supply side shocks
risk for investors
bad labour productivity
weak institutional frameowrks
not governed properla, no financal or legal or political
legal system
no insurance, no investment, treated unfiarly
inequality
largs groups cant contribute
polotical unrest and crime
businesses cant operate, attract finance trade and be productive
