Barriers To Development Flashcards
(8 cards)
What is Human Capital?
The knowledge and skills possessed by individuals in a population that can be used to produce economic value.
What is the Human Capital Gap?
the difference between the skills and knowledge of a workforce and the level required to support
sustainable economic growth and development
Problems with human capital gap?
• Hinders labour productivity growth
• Reduces innovation and technological progress
• Holds back increases in entrepreneurship
• Can deter foreign investment
• Reduces economic resilience to shocks
What is a Weak Institution?
when the legal, financial and political institutions are not well-established
Problems with weak institutions?
More difficult to establish property rights harder to access to credit & finance – may have to use informal financial sector; less say in how the economy is run - may not have a democratic vote
What is Corruption and what are some problems with it?
Corruption
- the abuse of public office for private gain – it can include, bribery of public officials when contracts are negotiated, bribery at customs facilities, money laundering, misappropriation of aid flows; illegal tax evasion
• Problems with corruption
- deters foreign investment by increasing the cost/risk of doing business; more allocative inefficiency - public resources are
diverted for private gain; political lobbying can sway government decisions; more persistent income & wealth inequality and reduced progress cutting extreme poverty; loss of trust - a breakdown of social capital; poorer human development outcomes because less tax revenue is collected
What are Property Rights?
identifying and titling land rights, protection of intellectual property, preventing illegal poaching, having the right to start & own a business, enables use of digital identity
programmes; helps prevents the Tragedy of the Commons
What are Infrastructure Gaps?
When the available infrastructure resources / investments do not fully meet those infrastructural needs adequately
Infrastructure projects are important and add to both AD and LRAS in an economy, often with high multiplier effects
