essay developing countries

119 Developing Countries Essay Topic Ideas & Examples

🏆 best developing countries topic ideas & essay examples, 👍 good essay topics on developing countries, 📌 most interesting developing countries topics to write about, ❓ questions about developing countries.

• Three Biggest Problems in the Developing Country-Ghana Education about AIDs in Ghana has helped to reduce the spread of the virus, which has consequently improved the lifestyle of many people living in the country.
• Modernization Theory and Developing Countries Proponents of modernization theory believe that the introduction of modern technology in manufacturing, technology and agriculture will lead to industrialization and development of the developing countries. We will write a custom essay specifically for you by our professional experts 808 writers online Learn More
• Tourism Contribution to the Developing Countries Development The money may be used to pay the workers at the tourism sites, construct good roads to the parks, provide environmental friendly recreational facilities inside the park and educate the people in the park surroundings […]
• Nestlé’s Ethical Issues in Developing Countries In this case, the ethical elements of the operations pose questions about the motives of such corporations, which results in displeasure to the greatest majority.
• Is India Still A Developing Country? The second reason is that due to the problems with employment, the project of development does not meet the expectations and entails a range of other failures.
• Impacts of Multinational Corporations (MNC) Involvement in Developing Countries MNCs contribute to the improvement of economies of the emerging states in different ways. MNCs also contribute to the improvement of social and development needs of the developing nations.
• The Similarity Between Developing Countries: Africa, Asia and South America These divisions fault line is across the social, economic, and politics of the country. This is the major cause of poverty and under development in these countries.
• Nike Company Analysis in Developing Countries Nike’s vision is to remain the “leading company in the industry by continuing to produce the high quality products that have long been provided in the past”.
• Education in Developing Countries Political independence brought young countries harsh difficulties including the problems with education; Children in such countries do not have access to high-quality education due to the poor technological, social, and economic development.
• Common Characteristics of Developing Countries Indeed, this is evident from the high number of slums and informal settlements within these nations. This is because the environment is the main source of food and other crucial resources.
• The Third World: Concept and Controversy The Third World, which is popularly referred to the countries of the south or developing countries, consists of many states in Africa, Caribbean, South America, Asia, and those in Central America.
• Causes of Corruption in Africa’s Developing Countries Corruption is the leading cause of underdevelopment and challenging economic conditions in Africa’s developing countries. Finally, legal and media institutions lack the freedom to practice justice and expose corruption.
• Hypertension in Developing Countries The article was received from the National Library of Medicine, demonstrating the credibility of the source. The second article is by Rovesti et al, and it explores a broader subject – the concept of health […]
• Public Health Outcomes for Women Experiencing Violence in Developing Countries The aim of this study is to determine risk factors and implications that violence against women has in developing world. The question for this research is: what type of factors can put women at a […]
• Health Inequalities in the Developing Countries Health inequalities refer to the variation of the health status among the members of society. Age is one of the essential determinants of the differences in the health situation of the members of society.
• Internationalization Process of Firms From Developing Country The systematization of the approach to the provision of related services is one of the successful strategies of IAID. According to Alyafei, the success of many Qatari SMEs is attributed to the efficient allocation of […]
• Birth Rates in Developed and Developing Countries Developed countries such as the United States and Australia have the same fertility rate of 1. Thus, the current paper tested a hypothesis concerning birth rate levels in developed and developing countries.
• Birth Rate in Developed and Developing Countries Since developing countries are often countries with a low standard of living, there is a problem of reducing the birth rate.
• Health Problems in Developing Countries Obeng-Odoom provides a debatable issue in terms of ‘NGOisation,’ privatization, and state strengthening of the health system to remedy the problems that exist in the sector.
• Central Banks in Developed and Developing Countries In the course of the evolution of the world economy, the central bank has become the prevailing type of monetary authority worldwide.
• Why Developing Countries Sign BITs The main advantage of bilateral investment treaties is that if the host state is alleged to breach the BIT, the investor does not need to ask the government to accept a claim.
• Labor Rights in Developing Countries Moreover, the Western companies have to be exemplary in their respect for the rights of the employees and promote ethical standards throughout all the stages of production of its goods and services.
• Entrepreneurial Activities in a Developing Country The article by Eijdenberg et al.aims to fill the gap in the literature concerned with entrepreneurs’ individual experiences and responses to institutional constraints to entrepreneurship.
• The Third World Countries: Development and Communication This paper examines the problems that prevent the development of the third world countries and the reasons why the western countries continue to progress on the other hand.
• How Would Debt Relief for Developing Countries Improve Their Situation? Lending windows have been introduced through the Poverty Reduction and Growth Trust which became effective in January 2010: the Extended Credit Facility, the Standby Credit Facility, and the Rapid Credit Facility.
• Management Accounting and Control: Micro-Businesses Issues in Developing Countries In that regard, it can be stated that the topics discussed in the article, either outlining the necessity for knowledge, providing the overview of the usage of this type of knowledge on the individual and […]
• Entrepreneurial Intention in Developing Countries From this table, one can see which of the concepts are found to be the most beneficial for the entrepreneurial intention in developing countries, and which barriers are the most detrimental.
• “Why Do Developing Countries Tax So Little?” by Besley and Persson The present paper offers a response to the article by discussing the major strengths and weaknesses of the arguments provided in the article and describing the implications of the findings.
• Clean Water Change the Lives of People in Developing Countries The first one is from Africa which is considered to be the most afflicted region in the world when it is referred to the issue of having the access to clean water and to any […]
• Development Programs Effectiveness in the Third World Countries The foundation of this critique is the disillusionment regarding the effectiveness of the development programs offered to the third world countries in earlier periods.
• The Problem of Developing Countries Access to the WTO Dispute Settlement In his article, Najah Hassan Salamah has reviewed the state of the Kingdom of Saudi Arabia in the WTO and whether the decision to join the organization was right for the economy of the state.
• War and Poverty Connection in Developing Countries The scholars claim that conflict and war in most nations have been found to exacerbate the rate of poverty in the affected nations.
• Pneumococcal Vaccines Markets in Developing Countries The main concern, however, remains to be the high cost of vaccines in the third world market. In other words, the capacity of production of pneumococcal vaccines is relatively high compared to the developing countries.
• Public Administration Role in Developing Countries: Mozambique The article has been keen to mention that, today, it is the overall duty for all the economists, accountants and even the dealing with public administration, especially with debt management and forecasting to come up […]
• Pricing AIDS Drugs Sold to Developing Countries The majority of the world’s HIV/AIDS cases are in Africa particularly the sub-Saharan and many of the infected have been faced with a huge challenge to live a normal life due to limitations in access […]
• Is Poverty From Developing Countries Imagined? That is why concepts like the “Third World Countries”, the “Second World Countries”, the “First World Countries” and now the “Developing Countries” has been coined.
• Remote Sensing and Geographical Information System for Developing Countries Knowledge of the impact and use of GIS is vital, and the most important in the application and understanding of GIS in traditional disciplines.
• Business in Developing Countries: India A number of studies have concluded that business is able to guarantee India and other South Asian countries the proper level of development; however, there exist certain pros and cons of business getting involved in […]
• Economic Growth & Developing Countries Sponsorship of trademarks will help the general public identifying the owner of goods in the market as also the availability of goods and services in the market and can protect people against false practices.
• Changes in World Trade Patterns of Developing Countries This is the rationale that explains the change in the trade pattern of developing countries. India is often showcased with regards to the trend of exporting and outsourcing of services, notably in IT.
• Micro-Credit Analysis in Several Developing Countries There are several countries who make use of micro-credit in their homeland and are improving their economic conditions with the help of their people.
• Women in Developing Countries: Globalization, Liberalization, and Gender Equality Owing to issues of gender, the voices of women in developing countries are never heard when it comes to the creation of trade agreements and policies or in their negotiations.
• The Pharmaceutical Industry and the AIDS Crisis in Developing Countries One of the reasons of this difference is that excise and custom duties that are responsible for the unaffordable prices of medicines have been avoided by the developed countries by the creation of pharmaceutical industries, […]
• Potentials for Tourism in Developing Countries Hence the enhancement of the tourism industry in the developing countries will enable these people to earn their living from this industry.
• Sociology of Mexico as a Developing Country It borders the Pacific Ocean on the west and south, on the north is the United States; on the east, it borders the Gulf of Mexico.
• Small & Medium Enterprises in Developing Countries In almost all the developed and developing countries, Small and Medium-Sized Enterprises rely on local skills and technology and contribute to the establishment and maintenance of entrepreneurship.
• Economic Growth Damage in Developing Countries During the creation of the European single currency, the EMU left the fiscal policy to the individual member states. Subsidization of agricultural products in developed countries leads to overproduction and thus affecting the trade cycle.
• Microfinance for Sustainability in Developing Countries To know whether microfinance institutions contribute to the alleviation of poverty in a poor society. To find out how microfinance institutions lead to the establishment of small businesses by poor individuals in society.
• Risks of Globalization in Developing Countries The presence of an educated populace in western countries is credited with developing creative business solutions that have helped to expand their country’s economies.
• Human Rights of Poor in Developing Countries Their interactions with those in authority and the decision makers in the society have been marred with many obstacles and denied the rights to freedom of speech and expression that is being enjoyed by the […]
• Economic Growth and Land Reform in Developing Countries The most common land reform approach is state-controlled land reforms where the state seeks to promote land redistribution to contribute to the socio-economic development of a country.
• Green Economy Transition for Developing Countries It emphasizes the fact that such an alteration is advantageous for them because it allows for the enhancement of the living conditions of the population when other practices turn out to be ineffective.
• Infant Feeding in Developing Countries Gibson, Ferguson, and Lehrfeld carried out this research in developing nations with the view of assessing the nutrient and energy sufficiency in various complementary foods given to children during winning period.
• Energy Poverty Elimination in Developing Countries Responding to the article by Sagar, I would like to emphasize that the establishment of a special fund to assist the mentioned countries in alleviating energy poverty is a feasible idea.
• E-Commerce Barriers in Developing Countries This proposal outlines the model of developing research paper on the assessment of e-commerce barriers, which prevent the advance of information technologies in the countries of the ‘Third World.’ Thus, the proposed research paper will […]
• Solid Waste Management in Developing Countries The major factors that affect the management of waste in cities in developing nations are an ever-increasing quantity of waste generated, overburdened municipal resources because of the increased cost of waste management, and insufficient understanding […]
• International Advertising’ Effects in Developing Countries International advertising has come with its positive and negative effects in the developing countries that range from social and economic to the political state of developing nations. The major aim of international advertising is to […]
• National Identity Cards in Developing Countries The proposed research study will seek to assess the loopholes that exist in the system for registered citizens in developing countries, particularly, in relation to financial infusion, insecurity, and terrorism, with a view of categorizing […]
• Economic Principles for Developing Countries The third principle that can help a developing country to facilitate the development of its economy is attention to small business.
• Sustainable Democracy in Developing Countries However, the sustainability of such states is dependent on a variety of factors such as the efficiency of the government and economic development of a country; to a great extent, the future of these democracies […]
• Technologies Effects in Developing Countries In the given paper, the positive and the negative effects of the newest technologies in developing countries are compared in order to consider the possible outcomes of the future advances and come up with the […]
• Mali as a Developing Country In the last five years, the government of Mali has endeavored to improve the northern part of the country through road construction.
• Property Tax Role in a Developing Country In the light of this view, this paper discusses the role of property tax to in helping a developing nation to attain the goals of encouraging capital formation, increase the rates of savings of its […]
• European Union and Developing Countries Due to the dynamics in the globe regarding development projects as well as aspects of priority in several countries, the EU has had to change its development policies over the years.
• Openness and Wage Inequality in Developing Countries As the author puts it, the conventional wisdom theory that was developed from the experience of the East Asian countries in the 1960s argues that increased openness to trade particularly in the developing countries increases […]
• How do Migration and Urbanization Bring About Urban Poverty in Developing Countries? When there is a high rate of rural to urban migration, there is pressure on the limited resources in the urban centers.
• The Impact of Internationalization on Developing Countries Consequently, the economies of developing countries are at the mercy of the dollar. As a result, the economies of these countries are stretched due to overspending on these goods.
• Censorship of Social Networking Sites in Developing Countries Censorship of social media sites is the control of information that is available to users. The aim of this paper was to discuss censorship of social media sites in third world countries.
• International Economy is Seen as Limiting Developing Countries’ Interests Alongside the creation of the huge gulf between developed and developing nations, the international economy seeks to limit the dominance of individual nations.
• Childhood Obesity in Developing Countries – A Global Health Issue Childhood Obesity and the Globe As mentioned earlier, according to the data of WHO, the number of obese children in the world today is more than 42 million, and the vast majority of them are […]
• Globalization Impacts on Developed and Developing Countries Hak-Min diverges from the analysis of Brittan that the allocation of profits between industrialized and countries of the periphery has befall less distorted by demonstrating that globalization in the incorporated global financial system has directed […]
• Methodologies and Principles of Project Management in Developing Countries I feel that despite the opening of doors welcome the principles of free and competitive market forces to drive the economic policies that aim at orienting the economies in the developing world, challenges persists in […]
• Judicial Corruption in Developing Countries It originates from the judges and lawyers who are at the center of the legal systems in Africa. There is a lingering culture of impunity in African leadership that is the primary cause of corruption.
• Globalization Negative Effects: Developed and Developing Countries The aim of this article is to assess the assertion that the negative effects of globalization impact developing countries more than developed countries.
• What Affects Migration Patterns in Developing Countries The fiscal situation of various high income countries presents either positive or negative impacts to the developing countries and the world economy at large for instance the market instability present in most of the European […]
• Sustainable Economic Future in Developing Countries Use of appropriate technology such as use of energy efficient modes of industrial production will reduce energy use in production thus cut back on energy use, which is a significant factor of environmental degradation through […]
• Environmental Policy Making in Developing Countries The country’s environment is one of the richest in the world because of not only the flora and fauna, but also because of its ecosystems, which contain an excess of 15 % of the plant […]
• Syria as a Developing Country The country of Syria “is an Asian country located on the eastern coast of the Mediterranean Sea, bordering Turkey to the north, Iraq to the east, Jordan and Palestine to the south, the Mediterranean Sea […]
• Tourism Growth in Developing Countries In terms of social life, tourism is highly regarded as a sector that has the ability to engage people and promote good relations.
• Poverty Indicators in Developing Countries It was chosen by the World Bank for use in determining the poverty rates of poor countries. Poor countries are given first considerations in programming and implementing of the World Bank’s projects.
• Effects of Globalization on Developed and Developing Countries The economic development in the Asian states in the early 21st century led to a decrease in the distorted allocation of profits between urbanized and emerging economies.
• Developed Countries and Developing Countries Interrelations The disparity in development has led to the grouping of the world states in to two broad groups i.e.developed countries and developing countries.
• Impact of Free Trade in Developing Countries Statement of the problem There are no clear data and information to coin to the impact of free trade on developing countries.
• Horizontal Inequalities, Political Environment and Civil Conflict: Evidence From 55 Developing Countries The author evaluates the tendency of conflicts at ethnic, religious and regional levels due to the effect of factors such as the type of regime and political alienation.
• Providing a Financial Aid to the Third World Countries One of the reasons why, during the course of the late 20th century, it became a commonplace practice among ‘progressive’ politicians in the West to advocate the idea of aid, is that during this time […]
• Dualistic Labour Market in Developing Countries It disapproves the dualistic labour market assumptions by reviewing the informal and formal labour markets of the developing countries and the inefficiencies that operate in these markets.
• Dementia Life Expectancy: Developed vs. Developing Countries Analysis of Economic Aspects Influencing the Lifespan of People with Dementia in Developing and Developed Countries On the one hand, the previously discussed studies point to the direct influence of age on life of people […]
• Urbanisation Provides Potential Socio-Economic Benefits for Developing Countries Towns and cities in developing countries become the centres of the social and economic progress because of the concentration of the maximum of the necessary forces in urban territories.
• Water Quality Issues in Developing Countries According to WHO, the quality of drinking water is a foundation for the prevention and control of waterborne ailments, thus water quality is a critical environmental determinant of health for populations using the water.
• Are Foreign Aid and Remittances a Hedge Against Food Price Shocks in Developing Countries?
• Has China De-industrialized Other Developing Countries?
• Does Competition Improve Productivity in Developing Countries?
• Can Climate Finance Contribute to Gender Equity in Developing Countries?
• Are Labor Markets Segmented in Developing Countries?
• How Does Climate Change Impact Food Availability in Developing Countries?
• Can Developing Countries Benefit From Strategic Export Promotion?
• Are Patent Laws Harmful to Developing Countries?
• What Is the Relationship Between Developed and Developing Countries?
• Can Higher Education Reduce Inequality in Developing Countries?
• Does Globalization Benefit Both Developed and Developing Countries?
• Are Public Investment Efficient in Creating Capital Stocks in Developing Countries?
• Can High-Inequality Developing Countries Escape Absolute Poverty?
• How Does Capitalism Influence the Debt of Developing Countries?
• Did Chinese Outward Activity Attenuate or Aggravate the Great Recession in Developing Countries?
• Can Latest Tech Be Appropriate for Developing Countries?
• Does Agriculture Really Matter for Economic Growth in Developing Countries?
• How Do European Policies Impact Developing Countries?
• Can Market Potential Explain Regional Disparities in Developing Countries?
• What Can European Experience Teach Developing Countries About Integration?
• Does Health Insurance Decrease Health Expenditure Risk in Developing Countries?
• Can Small Developing Countries Survive in a Globalized Environment?
• Does Infrastructure Alleviate Poverty in Developing Countries?
• Why Are Developing Countries Growing Faster Than Developed Countries?
• Can Micro Loans Help Reduce Poverty in Developing Countries?
• Does Migration Support Technology Diffusion in Developing Countries?
• Can Public Management Contribute to Governance in Developing Countries?
• What Is the Fastest Developing Country in Europe?
• Does Tourism Bring More Benefits Than Drawbacks to Developing Countries?
• Could Developing Countries Take the Benefit of Globalization?
• Chicago (A-D)
• Chicago (N-B)

IvyPanda. (2023, September 26). 119 Developing Countries Essay Topic Ideas & Examples. https://ivypanda.com/essays/topic/developing-countries-essay-topics/

"119 Developing Countries Essay Topic Ideas & Examples." IvyPanda , 26 Sept. 2023, ivypanda.com/essays/topic/developing-countries-essay-topics/.

IvyPanda . (2023) '119 Developing Countries Essay Topic Ideas & Examples'. 26 September.

IvyPanda . 2023. "119 Developing Countries Essay Topic Ideas & Examples." September 26, 2023. https://ivypanda.com/essays/topic/developing-countries-essay-topics/.

1. IvyPanda . "119 Developing Countries Essay Topic Ideas & Examples." September 26, 2023. https://ivypanda.com/essays/topic/developing-countries-essay-topics/.

Bibliography

IvyPanda . "119 Developing Countries Essay Topic Ideas & Examples." September 26, 2023. https://ivypanda.com/essays/topic/developing-countries-essay-topics/.

• Economic Topics
• Third World Countries Research Ideas
• Demography Paper Topics
• Poverty Essay Titles
• Immigration Titles
• Birth control Questions
• Refugee Paper Topics
• Agriculture Essay Ideas
• Capitalism Paper Topics
• Deforestation Research Ideas
• Child Labour Research Topics
• Equality Topics
• Famine Essay Titles
• Gender Discrimination Research Topics
• Macroeconomics Topics

Presentations made painless

• Get Premium

114 Developing Countries Essay Topic Ideas & Examples

Inside This Article

Title: 114 Developing Countries Essay Topic Ideas & Examples

Introduction:

When it comes to writing essays on developing countries, there is an abundance of topics to choose from. Exploring the social, economic, political, and environmental aspects of these nations provides an opportunity to understand the challenges they face as well as the potential for growth and progress. In this article, we present 114 essay topic ideas and examples that will help you delve into the complex issues surrounding developing countries.

Social Issues:

• Gender inequality and its impact on development in developing countries.
• The role of education in reducing poverty and promoting social mobility.
• Child labor: Causes, consequences, and possible solutions.
• The influence of cultural traditions on the status of women in developing countries.
• Healthcare challenges and solutions in developing nations.
• Exploring the correlation between population growth and poverty rates.
• The impact of migration on both the sending and receiving countries.
• Access to clean water and sanitation: Addressing the global water crisis.
• The role of NGOs in addressing social inequalities in developing countries.
• Analyzing the impact of urbanization on social structures in developing nations.

Economic Issues:

• The effects of foreign aid on economic development in developing countries.
• The role of microfinance in empowering individuals and communities.
• The impact of corruption on economic growth in developing nations.
• Strategies for promoting sustainable economic development in rural areas.
• Trade liberalization and its implications for developing countries.
• The role of multinational corporations in developing countries.
• The challenges and opportunities of entrepreneurship in developing nations.
• The impact of foreign direct investment on economic development.
• The role of agriculture in the economic development of developing countries.
• Economic inequality and its consequences for social stability.

Political Issues:

• Democracy and its challenges in developing countries.
• The impact of political instability on development efforts.
• The role of international organizations in promoting democracy in developing nations.
• The political economy of natural resource extraction in developing countries.
• The influence of colonialism on current political systems in developing nations.
• The challenges of implementing effective governance structures in developing countries.
• The role of civil society organizations in promoting political participation.
• The impact of climate change on political stability in developing nations.
• The role of international aid in shaping political systems in developing countries.
• The relationship between political ideology and development strategies.

Environmental Issues:

• Climate change and its effects on developing countries.
• Deforestation: Causes, consequences, and possible solutions.
• The impact of pollution on public health in developing nations.
• Sustainable energy solutions for developing countries.
• Water scarcity and its implications for agricultural productivity.
• Environmental conservation and economic development: A delicate balance.
• The role of indigenous communities in environmental protection.
• The challenges of waste management in urban areas of developing countries.
• The impact of overfishing on coastal communities in developing nations.
• The role of international agreements in addressing environmental challenges.

Examples of Developing Countries:

• The economic development of China and its impact on global trade.
• The challenges of poverty reduction in India.
• The role of South Africa in regional stability and economic development.
• The impact of tourism on the economy of Thailand.
• The agricultural revolution in Brazil and its effects on food security.
• Cuba's healthcare system: Achievements and challenges.
• The economic transformation of Rwanda after the genocide.
• The role of Bangladesh in the garment industry and its social implications.
• The challenges of sustainable development in Nigeria.
• The impact of remittances on the economy of the Philippines.

Conclusion:

Writing essays on developing countries provides an opportunity to understand the complexities and challenges faced by these nations, as well as their potential for growth and progress. The topics and examples provided in this article should inspire you to explore various aspects of social, economic, political, and environmental issues related to developing countries. By delving into these topics, you will gain a deeper understanding of the global dynamics and the importance of addressing the needs of these nations for a more sustainable and equitable world.

Want to create a presentation now?

Instantly Create A Deck

Let PitchGrade do this for me

Hassle Free

We will create your text and designs for you. Sit back and relax while we do the work.

Explore More Content

• Privacy Policy
• Terms of Service

© 2023 Pitchgrade

Final dates! Join the tutor2u subject teams in London for a day of exam technique and revision at the cinema. Learn more →

Reference Library

Collections

• See what's new
• All Resources
• Student Resources
• Assessment Resources
• Teaching Resources
• CPD Courses
• Livestreams

Study notes, videos, interactive activities and more!

Economics news, insights and enrichment

Currated collections of free resources

Browse resources by topic

• All Economics Resources

Resource Selections

Currated lists of resources

• Practice Exam Questions

Impact of Globalisation (Revision Essay Plan)

Last updated 11 Jan 2022

• Share on Facebook
• Share on Twitter
• Share by Email

Here is a suggested answer to a question on the impact of globalisation on developed and developing countries.

Introductory Context

An estimated 9 percent of the global population still lives below the international poverty line of US$1.90 PPP a day.Success in reducing poverty in East Asia is clear with 7 percent of the population in the region living below the US$3.20 PPP line and 25 percent living below the US$5.50 PPP poverty line in 2018. However, almost 70 percent of Sub-Saharan Africa’s population lives on less than US$3.20 per day. Progress in cutting extreme poverty has been halted by the pandemic. The World Bank estimated that the pandemic pushed between 119 and 124 million people into extreme poverty around the globe in 2020. Many developing countries have limited resilience to the impact of economic shocks and threats from climate change.”.

Source: Adapted from the World Bank Poverty Report, 2021

To what extent have the economic benefits of globalisation favoured developed over developing countries? (25 marks)

KAA Point 1

Globalisation involves deeper integration between countries through networks of trade, capital flows, ideas, technologies and movement of people. One argument that globalisation has favoured high-income countries lies in the growing dominance of TNCs from advanced nations. TNCs base their manufacturing, assembly, research and retail operations across several countries, and many have become synonymous with globalisation namely Nike, Apple, Amazon, Google (Alphabet) and Samsung. Some have annual revenues many times higher than the GDP of smaller low-income countries and there has been fierce criticism of numerous TNCs for following tax avoidance strategies such as transfer pricing. This has reduced tax revenues for governments in developing nations which then hampers their ability to use fiscal policy to fund public services such as education and basic health care. The effect is to limit progress in reducing extreme poverty and improving human development outcomes.

Evaluation Point 1

A counter argument is that globalisation is associated with a steady reduction in import tariffs around the world which has then improved access to high-income markets for businesses from emerging countries. Many nations in east Asia have achieved reductions in extreme poverty driven by export-led growth. The extract says that only 7 percent of this region’s population now live below the US$3.20 PPP poverty line and continued high growth – as economies recover from the effects of the pandemic - will lead to improvements in per capita incomes and living standards. Indeed, sixty percent of the value of world GDP now comes from emerging market and developing economies and several countries have their own TNCs operating on a global scale. The recent success of countries such as South Korea, India and Vietnam is testimony to the opportunities that globalisation has offered developing nations who have developed competitive advantage across a range of industries.

KAA Point 2

A second argument supporting the question is that nations succeeding in a globalizing world have diversified economies, a workforce with flexible skills and governments with fiscal resources to overcome external shocks such as the pandemic. In contrast, poorer low-income countries rely heavily on the production and export of primary commodities or incomes from tourism, both of which have been hit by the global recession in 2020-21. Many poorer nations also haveinadequate infrastructure which increases the costs of trade and their direct tax revenues as a share of GDP are low because of sizeable informal economies and persistently low per capita incomes. This means that national governments rely heavily on external debt, and many have low currency reserves. They are therefore more exposed to economic, financial and public health shocks. This is evidenced by the differences in vaccination rates between rich and low-income countries. As of January 2022, only 9% of people in low-income countries have received at least one dose and per capita incomes may take years to reach pre-2020 levels.

Evaluation Point 2

In evaluation, the globalisation process has been a catalyst for economic reforms in low and middle-income countries. Consider the example of Vietnam which has transitioned to a socialist oriented market economy and successfully attracted inward FDI from companies such as LG and Samsung. FDIhas flowed in helped by low unit labour costs costs, improving infrastructure and human capital and a deregulated business environment whilst the Vietnamesegovernment has moved to a managed floating exchange rateto help reduce some of the risks from regional and global economic shocks. Vietnam is a good example of a country that has successfully progressed from a low income to a low-middle income nation over the last two decades. The valueof their external trade accounts for roughly 180% of national output, more than any other country at its level of per-person GDP. And their educational scores on standardized tests are on a par with Germany and Austria.

Final Reasoned Comment

Overall, it is hard to reach a firm view on this question because globalisation as a process is uneven and not inevitable. Before and during the pandemic, there was evidence of a switch towards “regionalisation” rather than full-throttled globalisation. For example, most sub-Saharan African countries have joined the African Continental Free Trade Area which seeks to boost intra-regional trade and investment and encourage economies of scale among African businesses so that they can better compete against the dominance of Western TNCs. Developing nations often struggle to compete with developed countries, therefore it is argued free trade benefits high-income economies more. Gains from globalisation will never be equitably distributed.And this sense of deepening inequality and opportunity risks a further shift to tariff and non-tariff barriers to trade and moves towards economic nationalism.

• Globalisation
• Deglobalisation
• Hyper-globalisation
• Transnational Businesses
• Developing countries

You might also like

Benefits and costs of globalisation.

Study Notes

Import Protectionism - Main Arguments Against

Trading blocs and regional trade agreements (rtas), explaining business objectives, international trade, sources of comparative advantage, import protectionism explained, our subjects.

• › Criminology
• › Economics
• › Geography
• › Health & Social Care
• › Psychology
• › Sociology
• › Teaching & learning resources
• › Student revision workshops
• › Online student courses
• › CPD for teachers
• › Livestreams
• › Teaching jobs

Boston House, 214 High Street, Boston Spa, West Yorkshire, LS23 6AD Tel: 01937 848885

• › Contact us
• › Terms of use
• › Privacy & cookies

© 2002-2024 Tutor2u Limited. Company Reg no: 04489574. VAT reg no 816865400.

The Edvocate

• Lynch Educational Consulting
• Dr. Lynch’s Personal Website
• Write For Us
• The Tech Edvocate Product Guide
• The Edvocate Podcast
• Terms and Conditions
• Privacy Policy
• Assistive Technology
• Best PreK-12 Schools in America
• Child Development
• Classroom Management
• Early Childhood
• EdTech & Innovation
• Education Leadership
• First Year Teachers
• Gifted and Talented Education
• Special Education
• Parental Involvement
• Policy & Reform
• Best Colleges and Universities
• Best College and University Programs
• HBCU’s
• Higher Education EdTech
• Higher Education
• International Education
• The Awards Process
• Finalists and Winners of The 2022 Tech Edvocate Awards
• Finalists and Winners of The 2021 Tech Edvocate Awards
• Finalists and Winners of The 2020 Tech Edvocate Awards
• Finalists and Winners of The 2019 Tech Edvocate Awards
• Finalists and Winners of The 2018 Tech Edvocate Awards
• Finalists and Winners of The 2017 Tech Edvocate Awards
• Award Seals
• GPA Calculator for College
• GPA Calculator for High School
• Cumulative GPA Calculator
• Grade Calculator
• Weighted Grade Calculator
• Final Grade Calculator
• The Tech Edvocate
• AI Powered Personal Tutor

College Minor: Everything You Need to Know

14 fascinating teacher interview questions for principals, tips for success if you have a master’s degree and can’t find a job, 14 ways young teachers can get that professional look, which teacher supplies are worth the splurge, 8 business books every teacher should read, conditional admission: everything you need to know, college majors: everything you need to know, 7 things principals can do to make a teacher observation valuable, 3 easy teacher outfits to tackle parent-teacher conferences.

Developing Countries Essay Topics

• Water Quality Issues as a Critical Environmental Determinant of Health for Populations in Developing Countries
• How Urbanization Provides Potential for Towns and Cities in Developing Countries to Become the Centers of the Social and Economic Progress
• Analysis of Economic Aspects Influencing the Lifespan of People with Dementia in Developing and Developed Countries
• Dualistic Employment Market in Developing Nations
• The Effects of Multinational Companies (MNC) Involvement in Developing Nations
• The Commonplace Practice of Providing Financial Assistance to Third World Countries
• The Political Environment, Civil Conflict, and Horizontal Inequalities: Evidence from 55 Developing Countries
• Influence of Free Trade on Developing Nations
• Ghana’s Top Three Issues as a Developing Nation
• Contribution of Tourism to the Development of Developing Nations
• Developmental Inequality: Relationships between Developed and Developing Countries
• Globalization’s Impacts on Developed and Developing Nations
• Indices of Poverty in Developing Countries
• Tourism as a Sector that Can Engage People and Promote Good Relations in Developing Countries
• Making Environmental Policies in Developing Nations
• Future Economic Sustainability in Developing Nations
• Why Migration Patterns Vary in Developing Nations
• The Negative Effects of Globalization on Developed and Developing Countries
• Judicial Corruption as a Persistent Culture of Impunity in African Leadership in Developing Countries
• Project Management Methodologies and Guidelines in Developing Nations
• Globalization’s Effects on Developed and Developing Countries
• Obesity in Children in Developing Nations: A Global Health Concern
• Why the Global Economy Sees Developing Countries’ Interests as Constrained.
• Restriction of Social Media Sites in Third World Countries
• The Effects of Internationalization on Developing Nations
• How Does Urban Poverty Develop in Developing Nations Due to Migration and Urbanization?
• Wage Disparity and Transparency in Developing Nations
• Third World Nations and Modernization Principle
• Developing Economies and the European Union
• Significance of Property Taxes in Developing Nations
• The Developing Nation of Mali
• Effects of Technology Solutions on Developing Nations
• The Theoretical Framework and Debate of Developing Countries
• An Analysis of the Nike Company in Developing Nations
• India: Is it Still a Third World country?
• Sustainable Democracies in Underdeveloped Nations

Essay Topics on Developing Countries

• Economic Fundamentals for Developing Nations
• Government Identification Cards in Developing Nations
• The Ethical Challenges Facing Nestlé in Developing Nations
• Effects of Global Marketing on Developing Countries
• Handling of Solid Waste in Developing Nations
• Constraints to E-Commerce in Developing Nations
• Eradication of Energy Poverty in Developing Countries
• Neonatal Nutrition in Developing Nations
• Migration to a Green Economy for Underdeveloped Countries
• Land Reform and Economic Progress in Developing Nations
• Rights of the Poor in Developing Nations
• Standard Features of Developing Economies
• Transnational Risks in Underdeveloped Countries
• Microfinance for Sustainability in Developing Countries
• Adverse Effects of Economic Growth on Developing Nations
• Small and Medium Sized Businesses in Developing Nations
• Mexico’s Consumer Behavior as A Developing Nation
• The Windows of Opportunity in Tourism in Developing Nations
• The AIDS Epidemic and the Healthcare Sector in Developing Countries
• Globalization, Liberalism, and Gender Equality Among Women in Developing Countries
• An Analysis of Microlending Services in Several Developing Nations
• Trends in Developing Countries’ Foreign Trade Patterns
• Economically Developed and Developing Nations
• India: A Developing Country for Business
• Geographical Information Systems and Remote Sensing for Developing Nations.
• Is Poverty in Developing Countries Just an Imagination?
• Cost of AIDS Medications Offered to Developing Countries
• Markets for Pneumococcal Vaccines in Developing Nations
• An Analogy of Developing Countries: Africa, Asia, and South America
• Links between Poverty and War in Developing Countries
• Access to the WTO Dispute Settlement as a Concern for Developing Countries
• The Impact of Clean Water on People’s Lives in Developing Nations
• Besley and Persson’s “Why Do Developing Countries Tax So Little?”
• Entrepreneurial Aspiration in Developing Countries
• How Might Developing Nations’ Situations Be Made Better by Debt Relief?
• Progression and Communication in Third World Nations

Interesting Electrical Engineering Essay Topics

E-learning localization: everything you need to know.

Matthew Lynch

Related articles more from author, fascinating blade runner essay topics to write about, most interesting hunger games topics to write about, research topics about college students, research topics about ebay, simple & easy nervous system essay topics, mind essay topic ideas & examples.

Home — Essay Samples — Geography & Travel — Developing Country

Essays on Developing Country

Portugal: a historical and cultural overview, comparison between a developing and a developed country: uruguay and spain , made-to-order essay as fast as you need it.

Each essay is customized to cater to your unique preferences

+ experts online

Impact of Mnc and Globalisation on Developed and Developing World

Where the government's money is actually going in kuwait, living standard of developing countries, supporting the developing countries to use renewable resources, let us write you an essay from scratch.

• 450+ experts on 30 subjects ready to help
• Custom essay delivered in as few as 3 hours

Report on The Development of Ethiopia

Economic gap between the global north and south, india: emerging as a multi-sporting country, managing nigeria's resources: the route to development, get a personalized essay in under 3 hours.

Expert-written essays crafted with your exact needs in mind

A Study of Transnational Company's Impact Oт The Environment of Third World Countries

South korea:opportunities and disadvantages, the history of thailand, a research of whether brazil is a developed or a developing country, the composition of sri lanka island, to eradicate slums using technology in urban areas, what to visit in gambia, case study: a city where modernity meet tradition, seoul , review on the republic of chile, importance of foreign aid in developing nations, the opportuities of nigerian agriculture, the perfect country: myanmar, international development and its negative trends in modern day, the general characteristics of ethiopia, what it means for architecture to be sensitive and appropriate for its site, unique culture of nicaragua, brief description of the haiti, why china has continued to rise economically and her impact on the world economy, hybrid and renewable energy resources in india, innovation and entrepreneurship – a national perspective, relevant topics.

• Bermuda Triangle
• New Zealand
• Philippines
• Hospitality

By clicking “Check Writers’ Offers”, you agree to our terms of service and privacy policy . We’ll occasionally send you promo and account related email

No need to pay just yet!

We use cookies to personalyze your web-site experience. By continuing we’ll assume you board with our cookie policy .

• Instructions Followed To The Letter
• Deadlines Met At Every Stage
• Unique And Plagiarism Free

Essay Example on Developing Countries

• December 4, 2022

Global Trade Liberalization and The Developing Countries

Essay on Developing Countries Introduction

In today’s world, with the emergence of the internet and computer technologies, companies and countries have global market access in terms of brand recognition, customer segments, and bilateral trade relations (Gnangnon, 2018). More specifically, a company or country can reach billions of customers across the world, and trade has never been easier. Technological developments, improvements in infrastructure and logistics, and the collective and constructive approach to liberalization, especially after the 2nd World War, created a suitable environment of global prosperity, wealth, and multilateral benefits (Haas & Hird, 2017; Gnangnon, 2018). Arguably, in this direction, the world has become rapidly global and liberal within the last decade. In other words, under-developed, developing, and developed countries started to work together in a collective and competitive manner, and world trade has overcome traditional barriers and prejudices. In this assignment, global trade liberalization and developing countries have been meticulously examined. The paper presents insights, information, and comments into the integration into the world economy, resulting in integration with the world economy, the progress of integration, results of the integration, policies on trade liberalization, evidence, potential gains and benefits, and further liberalization recommendations for reaping the benefits. After all, one can highlight that although developing countries have benefited from liberalization and open economy, there are still certain barriers by the EU and the U.S., especially in the textile and agricultural industries.

International Trade and the World Economy

Economic growth, poverty reduction, and development have long been boosted by integration into the World Economy within the last decades (Haas & Hird, 2017). That is, the growth of world trade increased 6 percent per year, two times more than the average of the world output (IMF Staff, 2001). Nevertheless, one can readily infer that trade was already considered a predominant factor for obtaining growth (Haas & Hird, 2017; Gnangnon, 2018). Since the end of the 2nd World War, the global trading system made use of “eight rounds of multilateral trade liberalization, as well as from unilateral and regional liberalization” (IMF Staff, 2001). In this direction, the General Agreement on Tariffs and Trade (GATT) was approved by many countries, and the world of trade was enabled on a large scale. Moreover, the last one of these rounds, called “Uruguay Round,” which was completed in 1994, resulted in the foundation of the World Trade Organization (WTO) (IMF Staff, 2001). The organization provides a suitable and meticulous environment for organizing and arranging the increasing and gradual bodies of multilateral trade regulations and agreements.

Integration into the world economy refers to secure access to global open markets. This approach can be boosted by related regulations and policies that enable developing and emerging countries to take part in developed markets, or vice versa (Gnangnon, 2018). For instance, Turkey is a strong engine semi-parts manufacturer. That is, rather than wholly manufacturing a full functioning engine, the country is concentrated on manufacturing parts to support developed factories in industrial countries (Altuntaş et al., 2009). This collective approach benefits both developed countries and developing Turkey and creates a win-win trade environment. In this sense, Turkey is supported by some regulations, including customs agreements between the EU and Turkey.

The living standards across the world have been boosted as a result of the integration of the world. Most of the developing countries could improve in many fields, thanks to the global aspects of international trade. That is, they have had a suitable environment and tariffs for exporting and importing goods with many other developed and developing countries; and subsequently, the incomes of such countries have dramatically risen and brought prosperity to developing nations across the globe (Gnangnon, 2018). More specifically, while developing countries used to account for one-fourth of the overall world trade during the 60s and 70s, they now account for one-third of the world economy (IMF Staff, 2001). In this direction, many developing countries have drastically developed their infrastructure and manufacturing capabilities as a result of free access to global markets.

Similarly, the relations and trade between developing and developed countries increased in a rapid manner (Cornia, 2020; Gnangnon, 2018). In other words, 80 percent of the overall exports of developed countries are now going to developing countries (IMF Staff, 2001). In this sense, one can readily infer that the integration of the world economy has both benefited developing and developed countries in terms of trade access, income, manufacturing, and infrastructure, as well as international relations and politics implicitly.

Although the integration has long been considered as hugely beneficial to many countries across the globe, the developments in recent decades have shown us that the progress was sometimes uneven. While some Asian countries, including China and Japan, benefited a lot, Latin American countries, unfortunately, could not satisfyingly make use of the integration. The reasons behind the success of Asian countries stem from the fact that these countries were successful at implementing required internal regulations in order to take part in international trade by attracting foreign trade investments (FDI) to their countries. Especially India and China “embraced trade liberalization and other market-oriented reforms, and also of higher-income countries in Asia—like Korea and Singapore—that were themselves poor up to the 1970s” (IMF Staff, 2001). In this sense, one can conclude that the progress of integration has highly been dependent on the internal regulations and the pace of adaptation of developing countries. That is, although Asian countries were willing and successful in implementing and embracing new global regulations, especially Latin America and North African countries could not successfully adapt themselves, resulting in comparably fewer benefits in terms of income and wealth.

As mentioned earlier, although willing countries have benefited a lot from the integration, Latin America, Middle East, and African countries could not keep up with the new developments in world trade. That is, “the poorest countries have seen their share of world trade declined substantially, and without lowering their own barriers to trade, they risk further marginalization” (IMF Staff, 2001). Unlike successful countries, these countries faced structural problems with their economies, weak policies and regulations, and over-protection of trade in many aspects.

After all, although some countries failed to integrate into the world economy, many developing countries such as Indonesia, Turkey, Brazil, and India could make use of such an advantage. Between 2002 and 2010, after an almost whole integration into the European and American markets, the Turkish economy showed a sustainable growth rate, and they managed to get rid of extra zero in the national currency. The development was so rapid and beneficial that in 2008, 1 Turkish lira was worth 0.82 $US, and that rate was recorded in Turkish history (Altunbaş et al., 2009). As a developing country, Turkey integrated its internal and external assets into the world economy by freeing and opening its markets and took a great deal of FDI. Thus, international organizations could invest in Turkey because of its literate population and benefited both sides. As a result, while there are contrary examples, countries that managed to comply with the requirements of liberalization and free economy have long benefited from the globalization.

The Benefits of Trade Liberalization

Sustainable economic growth requires strong and decent policies aimed at international liberalization and trade. No need for evidence, this condition is clear. That is, not a single country was successful at improving their income, trade, and living standards without making their economy and country to open to other economies and international trade environment. For instance, the success of Asian economies are clear examples; they lowered their trade tariffs from %30 to %10 within the last decades. In this direction, one can highlight those nations should implement accessible and comprehensible regulations and policies that ease the process of international trade and globalization.

In the manufacturing of certain products, opening up economies creates many advantages to the global economy in order to boost the competitive advantage of nations. South Korea and North Korea can be given as explicit examples. While South Korea has been open to the world economy for many decades now, North Korea was extremely close to other nations, not only in terms of economy but culture as well. When considered the overall wealth of both countries, the advantages of the open economy are clear. Open economy enables a multinational, cultural, and bilateral advantage for many countries, and these eventually attract foreign direct investments, which bring wealth to the nation.

There are substantial evidence and statistics regarding oriented countries in terms of integration to world economies. “Countries that have opened their economies in recent years, including India, Uganda, and Vietnam, have experienced faster growth and more poverty reduction” (IMF Staff, 2001). In other words, those countries decreased their tariff rate during the 80s and experienced substantial economic growth in the following years.

Getting rid of trade barriers and integrating into the world economy creates many advantages. “Estimates of the gains from eliminating all barriers to merchandise trade range from US$250 billion to US$680 billion per year” (IMF Staff, 2001). Also, almost 70% percent of this income benefited developing countries directly or implicitly. Moreover, developed countries have more protective measures against trade, and one can highlight that developing countries tend to benefit more from an international open market.

Further Liberalization of International Trade

The information is given above clearly supports the idea of further liberalization. That is, the state of open market and protection are significant for both developing and developed countries because each nation may have a comparative advantage on a single product, while there still exists a need for other types of goods, and the concept of free trade and liberalization creates a mutual and bilateral advantage for both group of countries. In general, industrial (developed) countries tend to implement high protection and tariffs for agricultural products. In other words, according to the statistics, the average tariff in agriculture is almost nine times more than the manufacturing industry (IMF Staff, 2001). Moreover, agricultural manufacturing and subsidies in developing countries lead to pre-empting markets and a depressive market by undermining developing countries. As an example, “European Commission is spending 2.7 billion euro per year making sugar profitable for European farmers at the same time that it is shutting out low-cost imports of tropical sugar” (IMF Staff, 2001). In this direction, one can claim that protection over agricultural product and imports in developed countries result in a depressive agricultural sector for developing countries that aim to sell agricultural products for their GDP and economy.

The protection of manufacturing is not quite strict in developed countries. However, many labor-intensive products tend to be protected. For instance, “the U.S., which has an average import tariff of only 5 percent, has tariff peaks on almost 300 individual products, which are largely on textiles and clothing, which account for 90 percent of the $1 billion annually in U.S. imports from the poorest countries” (IMF Staff, 2001). Similarly, other types of labor-intensive products are subjected to tariff escalation and peaks. In this direction, developing and emerging countries find it hard to manufacture labor-intensive value-added products because of tariff peaks in those (developed) countries. Nevertheless, developing countries also implement high tariffs. Generally, their tariff on manufactured industrial products tend to be four times more than of developed countries, and they tend to show the same characteristics with industrial countries in terms of tariff policies on value-added products.

Because of tariff peaks and barriers, nontraditional measures have become common in global trade. That is, both developing and developed countries implement anti-dumping measures. Also, sanitary and technical standards of import can sometimes become overwhelmed. Moreover, there may be extra charges for exporters, especially to the European Union. For instance, “EU regulations on aflatoxins are costing Africa $1.3 billion in exports of cereals, dried fruits, and nuts per European life saved” (IMF Staff, 2001). In this sense, one can readily question the balance of costs and benefits in terms of exporter and customers with such regulations.

As global trade is proven to boost economic growth and wealth for both sides, further liberalization by developing and developed countries should be improved. More specifically, international communities and especially developed countries should realize the barriers to developing and poorer countries and come up with constructive policies to attract production and manufacturing across the globe. That is, especially for textile and agriculture, regulations in the EU and the U.S. should be reviewed because they are extremely strict and create disadvantages and comparative inferiority for poor countries. Similar to this, decreases on tariff escalation and peaks should be implemented to boost world trade. After all, enhanced market access for poor and developing countries will eventually result in a better income and decrease in poverty across the world.

Reaping the Benefits

Although the steps taken after the 2nd World War created a liberal trade environment, failures such as the WTO Conference in 1999 led to drawbacks and challenges for the international trade environment (Haas & Hird, 2017). These kind of agreements and multilateral initiatives are extremely significant because they provide many countries with visible benefits that eventually lead to economic growth, increased GDP, and enhance available markets across the world. In this sense, potential failures may include ineffective agreements and negotiations that merely benefit one group of countries. In other words, trade is a collective win-win outcome, and benefiting only one group will eventually result in failure.

In conclusion, in this assignment, global trade liberalization and developing countries have been meticulously examined. The paper presents insights, information, and comments into the integration into the world economy, resulting in integration with the world economy, the progress of integration, results of the integration, policies on trade liberalization, evidence, potential gains and benefits, and further liberalization recommendations for reaping the benefits. Economic growth, poverty reduction, and development have long been boosted by integration into the World Economy within the last decades. Integration into the world economy refers to easy access to global open markets. This approach can be boosted by related regulations and policies that enable developing and poor countries to take part in developed markets, or vice versa. Although the integration has long been considered as hugely beneficial to many countries across the globe, the developments in recent decades have shown us that the progress was sometimes uneven. While some Asian countries, including China and Japan, benefited a lot, Latin American countries, unfortunately, could not satisfyingly make use of the integration. International communities and especially developed countries should realize the barriers to developing and poorer countries and come up with constructive policies to attract production and manufacturing across the globe. After all, one can highlight that although developing countries have benefited from liberalization and open economy, there are still certain barriers by the EU and the U.S., especially in the textile and agricultural industries.

Altunbaş, Y., Kara, A., & Olgu, Ö. (2009). Overview of the Turkish economy. Turkish Banking, 7-39.

Cornia, G. A. (2020). Macroeconomic stabilization in developing countries. The Macroeconomics of Developing Countries, 309-327.

Gnangnon, S. K. (2018). Effect of multilateral trade liberalization on foreign direct investment outflows amid structural economic vulnerability in developing countries. Research in International Business and Finance, 45, 15-29.

Haas, P., & Hird, J. A. (2017). Trade liberalization and economic growth: Does trade liberalization contribute to economic prosperity? Controversies in Globalization: Contending Approaches to International Relations, 1-39.

IMF Staff. (2001). Global trade liberalization and the developing countries -- An IMF issues brief.

Recently on Tamara Blog

Essay on Animal Farm by Orwell – Free Essay Samples

“Animal Farm” by George Orwell is a literary masterpiece that tells the story of a group of farm animals who rebel against their human farmer and establish a socialist community based on the principles of equality and mutual respect (Orwell, 1945). However, over time, the pigs who lead the revolution gradually become corrupted by power and begin to oppress and exploit the other animals, ultimately turning the farm into a totalitarian state.

Essay on Cyberbullying – Free Essay Samples

Bullying is an aggressive behavior that is intentional and repeated, aimed at causing harm or discomfort to a person, and often takes place in social environments such as schools, workplaces, and online platforms. Cyberbullying is a relatively new form of bullying that has emerged with the widespread use of technology and the internet. Cyberbullying refers to bullying behaviors that occur online or through electronic means, such as social media, text messages, and emails.

Essay on Nature vs. Nurture – Free Essay Samples

The debate over nature versus nurture has been a longstanding topic of interest among psychologists and other scholars. The two concepts, nature and nurture, are frequently used to explain human development and behavior.

Lord of the Flies Essay – Free Essay Samples

Veterans have played a critical role in the history of the United States, serving their country in times of war and peace. Despite their sacrifices, many veterans face significant challenges, including physical and mental health issues, homelessness, and unemployment.

Why Veterans Are Important – Free Essay Samples

American dream essay – free essay samples.

The American Dream has been a central concept in American culture for decades, representing the idea that anyone, regardless of their background, can achieve success and prosperity through hard work and determination. The concept of the American Dream is rooted in the country’s history and has been promoted in various ways, from the founding fathers’ beliefs to the post-World War II era.

Essay on the Economic Development of a Country

In this essay we will discuss about the Economic Development of a Country. After reading this essay you will learn about: 1. Economic Growth and Economic Development 2. Determinants of Economic Development 3. Obstacles or Constraints 4. Pre-Requisites or Need 5. Structural Changes.

• Essay on the Structural Changes During Economic Development

Essay # 1. Meaning of Economic Development:

Again Mrs. U.K. Hicks opined, “Economic Development deals with the problem of underdeveloped countries whereas ‘Economic Growth’ deals with the problem of developed countries. In underdeveloped countries the problems are that of initiating and accelerating development.”

According to Maddison, “the raising of income levels is generally called economic growth in rich countries and in poor ones, it is called economic development.”

ADVERTISEMENTS:

The processes of economic development should not only generate increased or enhanced means of production but it should also make room for equitable distribution of such resources. Thus by the term economic development we mean a process so as to raise the per capita output with a scope for equitable distribution.

Prof. Meier has rightly said, “We shall define economic development as the process whereby per capita income of a country increases over a long period of time.” Here the word “process” indicates long period changes related to changes in demand side as well as changes in factor supply.

Changes arising on the demand side are mostly related to consumers, tastes and preferences, distribution of income, size and composition of country’s population, and other organisational and institutional changes.

On the other hand, changes arising on the factor supply are also related to—capital accumulation, discovery of new resources, introduction of new and more efficient production techniques, increase in size of population and organisational changes. Cause and consequences of economic development are mostly determined by the time path and velocity of these aforesaid changes.

Economic development, being a dynamic concept refers to the continuous increase in production over the changing time path. Secondly, attainment of economic development indicates increase in real per capita income over time. Here the real per capita income of a country simply indicates total money income adjusted to price level changes over time, i.e.

r = y/p where r = real income; y = money income and p = price level.

Thirdly, by the term economic development we mean continuous increase in the level of real national income over longer time period, covering a period, not less than 25 to 30 years.

While explaining the distinction between economic development and economic growth, C.P Kindleberger observed, “Economic growth means more output and economic development implies both more output and changes in the technical and institutional arrangements, by which it is produced.”

As per this view, the term growth implies higher level of output as well as achievements in terms of increase in the volume of economic variables. Accordingly, Kindleberger further observed, “Growth involves focussing on height or weight, while development draws attention to the change in functional capacity.”

Although some economists have observed slight differences between economic development and economic growth but all these differences are imaginary and unreal and thus have little practical value. In this connection Prof. Arthur Lewis has rightly observed, “Most often we shall refer only to ‘Growth’ but occasionally, for the sake of variety to ‘Progress’ and ‘Development.’

Essay # 2. Determinants of Economic Development:

By economic development we mean attainment of higher level of productivity in almost all the sectors and a better level of living for the general masses. The path of economic development in an underdeveloped economy is full of hurdles or impediments.

Attaining higher level of economic development is a function of level of technology. Economic development is thus a process of raising the rate of capital formation, i.e. both physical capital and human capital.

Moreover, the task of economic development is influenced by a number of factors such as—economic, political, social, technological, natural, administrative etc. According to Prof. W.A. Lewis, there are three principal causes of economic development.

(i) Efforts to economise, either by reducing the cost of any product or by raising the yield from any given input or other resources,

(ii) Increase in knowledge and its appropriate application and

(iii) Amount of capital or other resources for land.

While analysing the determinants of economic growth, Prof. J.J. Spengler and W.W. Rostow have made sincere attempts in this regard. Prof. Spengler has listed about nineteen determinants but Rostow mentioned six propensities having much bearing on economic growth.

These propensities are:

(1) Propensity to develop fundamental services,

(2) Propensity to apply science to economic ends,

(3) Propensity to initiate technical innovations,

(4) Propensity to have material advance,

(5) Propensity to consume and

(6) Propensity to have children.

All these propensities are showing a clear-cut picture of determinants of economic growth neglecting the non-economic factors totally. Regarding the determinants of economic growth, Prof. Ragnar Nurkse observed that “Economic development has much to do with human endowments, social attitude, political conditions and historical accidents.”

Again Prof. P.T. Bauer also mentioned that, “The main determinants of economic development are aptitude, abilities, qualities, capacities and facilities.” Economic development of a country thus depends on both economic and non-economic factors.

Following are some of important economic and non-economic factors determining the pace of economic development in a country:

A. Economic Factors:

1. Population and Manpower Resources:

Population is considered as an important determinant of economic growth. In this respect population is working both as a stimulant as well as hurdles to economic growth. Firstly, population provides labour and entrepreneurship as an important factor service.

Natural resources of the country can be properly exploited with manpower resources. With proper human capital formation, increasing mobility and division of labour, manpower resources can provide useful support to economic development.

On the other hand, higher rate of growth of population increases demand for goods and services as a means of consumption leading to increasing consumption requirements, lesser balance for investment and export, lesser capital formation, adverse balance of trade, increasing demand for social and economic infrastructural facilities and higher unemployment problem.

Accordingly, higher rate of population growth can put serious hurdles on the path of economic development Moreover, growth of population at a higher rate usually eat up all the benefits of economic development leading to a slow growth of per capita income.

But it has also been argued by some modern economists that with the growing momentum of economic development, standard of living of the general masses increases which would ultimately create a better environment for the control of population growth. Moreover, Easterlin argued that population pressure may favourably affect individual motivation and this may again lead to changes in production techniques.

Thus whether growing population in a country practically retards economic growth or contributes to it that solely depends on the prevailing situation and balance of various other factors determining the growth in an economy.

2. Natural Resources and its Utilization:

Availability of natural resources and its proper utilization are considered as an important determinant of economic development. If the countries are rich in natural resources and adopted modern technology for its utilization, then they can attain higher level of development at a quicker pace. Mere possession of natural resources cannot work as a determinant of economic development.

Inspite of having huge variety of natural resources, countries of Asia and Africa could not attain a higher level of development due to lack of its proper utilization. But countries like Britain and France have modernised their agriculture in spite of shortage of land and the country like Japan has developed a solid industrial base despite its deficiency in natural resources.

Similarly, Britain has developed its industrial sector by importing some minerals and raw materials from abroad.

However, an economy having deficiency in natural resources is forced to depend on foreign country for the supply of minerals and other raw materials in order to run its industry. Thus in conclusion it can be observed that availability of natural resources and its proper utilization is still working as an important determinant of economic growth.

3. Capital Formation and Capital Accumulation:

Capital formation and capital accumulation are playing an important role in the process of economic development of the country. Here capital means the stock of physical reproducible factors required for production. The increase in the volume of capital formation leads to capital accumulation.

Thus it is quite important to raise the rate of capital formation so as to accumulate a large stock of machines, tools and equipment by the community for gearing up production.

Thus Prof. Ragnar Nurkse has rightly observed, “The meaning of capital formation is that society does not apply the whole of its current activity to the needs and desires of immediate consumption, but directs a part of it to the making of capital goods—tools and instruments, machines and transport facilities, plant and equipment.”

There are three stages in the process of capital formation, i.e.,

(a) Generation of saving,

(b) Mobilisation of savings and

(c) Raising the volume of investment.

Moreover, capital formation requires the suitable skill formation so as to utilise physical apparatus or equipment for raising the productivity level.

In an economy, capital accumulation can help to attain faster economic development in the following manner:

(a) Capital plays a diversified role in raising the volume of national output through changes in the scale or technology of production;

(b) Capital accumulation is quite essential to provide necessary tools and inputs for raising the volume of production and also to increase employment opportunities for the growing number of labour force;

(c) Increase in capital accumulation at a faster rate results increased supply of tools and machinery per worker.

Various developed countries like Japan have been able to attain higher rate of capital formation to trigger rapid economic growth. Normally, the rate of capital formation in underdeveloped countries is very poor. Therefore, they must take proper steps, viz., introduction of compulsory deposit schemes, curtailing the conspicuous consumption, putting curbs on imports of consumption goods, inflow of foreign capital etc.

In order to attain a rapid economic growth, the rate of domestic savings and investment must be raised to 20 per cent.

Naturally, in the initial period, it is not possible to step up the rate of capital formation at the required rate by domestic savings alone. Initially, to step up the rate of investment in the economy, inflow of foreign capital to some extent is important. But with the gradual growth of domestic savings in the subsequent years of development, the dependence on foreign capital must gradually be diminished.

Being a technologically backward country, India has decided to permit foreign direct investment in order to imbibe advanced technology for attaining international competitiveness under the present world trade and industrial scenario.

Rate of growth of GNP = (Savings ratio/ Capital output ratio)

4. Capital-Output Ratio:

Capital-output ratio is also considered as an important determinant of economic development in a country. By capital-output ratio we mean number of units of capital required to produce per unit of output. It also refers to productivity of capital of different sectors at a definite point of time.

But the capital output ratio in a country is also determined by stage of economic development reached and the judicial mix of investment pattern. Moreover, capital-output ratio along with national savings ratio can determine the rate of growth of national income.

This is a simplified version of Harrod-Domar Model. This equation shows that rate of growth of GNP is directly related to savings ratio and inversely related to capital-outlet ratio.

Thus to achieve a higher rate of growth of national income, the country will have to take the following two steps:

(a) to raise the rate of investment and

(b) to generate necessary forces for reducing capital-output ratio.

5. Favourable Investment Pattern:

Favourable investment pattern is an important determinant of economic development in a country. This requires proper selection of industries as per investment priorities and choice of production techniques so as to realise a low capital-output ratio and also for achieving maximum productivity.

Thus in order to attain economic development at a suitable rate, the Government of the country should make a choice of suitable investment criteria for the betterment of the economy. The suitable investment criteria should maximise the social marginal productivity and also make a balance between labour intensive and capital intensive techniques.

6. Occupational Structure:

Another determinant of economic development is the occupational structure of the working population of the country. Too much dependence on agricultural sector is not an encouraging situation for economic development.

Increasing pressure of working population on agriculture and other primary occupations must be shifted gradually to the secondary and tertiary or services sector through gradual development of these sectors.

In India, as per 1991 census, about 66.0 per cent of the total working population was absorbed in agriculture. As per World Development Report, 1983, whereas about 45 to 66 per cent of the work force of developed countries was employed in the tertiary sector but India could absorb only 18 per cent of the total work force in this sector.

The rate of economic development and the level of per capita income increase as more and more work force shift from primary sector to secondary and tertiary sector.

As A.G.B. Fisher writes, “We may say that in every progressive economy there has been a steady shift of employment and investment from the essential ‘Primary activities’,……………………..to secondary activities of all kinds and to a still greater extent into tertiary production.”

Thus to attain a high rate of economic development, inter-sectoral transfer of work force is very much necessary. The extent and pace of inter-sectoral transfer of work force depend very much on the rate of increase in productivity in the primary sector in relation to other sectors.

7. Extent of the Market:

Extent of the market is also considered as an important determinant of economic development. Expansion of the scale of production and its diversification depend very much on the size of the market prevailing in the country.

Moreover, market created in the foreign country is also working as a useful stimulant for the expansion of both primary, secondary and tertiary sector of the country leading to its economic development. Japan and England are among those countries which have successfully extended market for its product to different foreign countries.

Moreover, removal of market imperfections is also an important determinant of economic development of underdeveloped countries. Accordingly, market in those countries must be free from all sorts of imperfections retarding the economic development of the country.

Removal of market imperfections will make provision for flow of resources from less productive to more productive occupations which is very much important for the development of an underdeveloped economy.

8. Technological Advancement:

Technological advancement is considered as an important determinant of economic growth. By technological advancement we mean improved technical know-how and its broad- based applications.

It includes:

(a) Use of technological progress far economic gains,

(b) Application of applied sciences resulting in innovations and inventions and

(c) Utilisation of innovations on a large scale.

With the advancement of technology, capital goods became more productive. Accordingly, Prof. Samuelson rightly observed that “High Invention Nation” normally attains growth at a quicker pace than “High Investment Nation”.

There may be three forms of technological advancement, i.e.:

(a) Capital saving

(b) Labour saving  and

(c) Neutral.

The following conditions must be satisfied for attaining technological advancement in a country:

(a) making provision for large investments in research,

(b) ability to realise the possibilities of using scientific inventions and innovations for commercial purposes and expansion and diversification of the market for its product.

As underdeveloped countries have failed to fulfill these conditions thus their development process is neither self-sustaining nor cumulative. Thus in order to attain a higher rate of development, the underdeveloped countries should adapt only that type of technology which can suit their requirements.

Developing countries like Mexico, Brazil and India have been applying technologies developed by advanced countries as per their own conditions and requirements. Thus to attain a high level of economic development, the under-developed countries should try to achieve technological progress at a quicker pace.

9. Development Planning:

In recent years, economic planning has been playing an important role in accelerating the pace of economic development in different countries. Economic development is considered as an important strategy for building various social and economic overhead infrastructural facilities along with the development of both agricultural, industrial and services sectors in a balanced manner.

Planning is also essential for mobilisation of resources, capital formation and also to raise the volume of investment required for accelerating the pace of development. Countries like former U.S.S.R. and even U.S.A. and West Germany have achieved a rapid development through the adoption of economic planning.

10. External Factors:

The present situation in the world economy necessitates active support of external factors for sustaining a satisfactory rate of economic growth in underdeveloped economies. Moreover, domestic resources alone cannot meet the entire requirement of resources necessary for economic development.

Therefore, at certain levels, availability of foreign resources broadly determines the level of economic development in a country.

The external factors which are playing important role in sustaining the economic development include:

(a) Growing export earnings for financing increasing import bills required for development,

(b) Increasing flow of foreign capital in the form of direct foreign investment and participation in equity capital and

(c) international economic co-operation in the form of increasing flow of foreign aid from advanced countries like U.S.A., Japan etc. and also increased volume of concessional aid from international institutions like I.M.F., I.B.R.D. (World Bank) and other regional bodies on economic co-operation like ASEAN, OPEC, E.E.C. etc.

B. Non-Economic Factors:

Economic factors alone are not sufficient for determining the process of economic development in a country. In order to attain economic development proper social and political climate must be provided.

In this connection, united Nation Experts observed, “Economic Progress will not occur unless the atmosphere is favourable to it. The people of a country must desire progress and their social, economic, legal and political situations must be favourable to it.”

Emphasising the role of non-economic factors, Prof. Cairncross observed, “Development is not governed in any country by economic forces alone and the more backward the country is, the more this is true. The key to development lies in men’s minds, in the institution in which their thinking finds expression and in the play of opportunity on ideas and institution.”

Again Prof. Macord Wright writes, “The fundamental factors making economic growth are non-economic and non-materialistic in character. It is spirit itself that builds the body.” Prof. Ragnar Nurkse has further observed, “Economic development has much to do with human endowments, social attitudes, political conditions and historical accidents.”

Underdevelopment countries are facing various socio-political hurdles in the path of economic development. Thus in order to attain economic growth, raising the level of investment alone is not sufficient rather it is also equally important to gradually transform outdated social, religious and political institution which put hindrances in the path of economic progress.

Thus following are some of the important non-economic factors determining the pace of economic development in a country:

a. Urge for Development: 

It is the mental urge for development of the people in general that is playing an important determinant for initiating and accelerating the process of economic development. In order to attain economic progress, people must be ready to bear both the sufferings and convenience. Experimental outlook, necessary for economic development must grow with the spread of education.

b. Spread of Education:

Economic progress is very much associated with the spread of education. Prof. Krause has observed that, “Education brings revolutions in ideas for economic progress.” Education provides stimulus to economic growth as it teaches honesty, patriotism and adventure. Thus education is working as an engine for economic development.

In this connection, Prof. H.W. Singer has rightly observed, “Investment in education is not only highly productive but also yields increasing returns. So, education plays pioneer role for the creation of human capital and social progress which in turn determines the progress of the country.”

c. Changes in Social and Institutional Factors:

Conservative and rigid social and institutional set up like joint family system, caste system, traditional values of life, irrational behaviour etc. put severe obstacle on the path of economic development and also retards its pace.

Thus to bring social and institutional change as per changing environment and to realise the modern values of life are very much important for accelerating the pace of economic development in a country.

Prof. Meier and Baldwin have observed that, “Not only must economic organisation be transformed but social organisation must also be modified so that basic complex of values and motivation may be more favourable for economic change and cultural change.”

d. Proper Maintenance of Law and Order:

Maintenance of law and order in a proper manner also helps the country to attain economic development at a quicker pace. Stability, peace, protection from external aggression and legal protection generally raises morality, initiative and entrepreneurship.

Formulation of proper monetary and fiscal policy by an efficient government can provide necessary climate for increased investment and also can stimulate capital formation in the country.

Thus in order to accelerate the pace of economic development the government must make necessary arrangement for the maintenance of law and order, defence, justice, security in enjoyment in property, testamentary rights, assurance to continue business covenants and contracts, provision for standard weights and measures, currency and formulation of appropriate monetary and fiscal policies of the country.

But the economy of underdeveloped countries is now facing serious threat from large scale disorder, terrorism, disturbances in the international border etc. All these have led to diversion of resources and initiatives from developmental to non-developmental ends.

Moreover, under such a chaotic situation, capital formation process, business initiatives and enterprise of private firms are seriously suffered and distorted leading to a stagnation of economy in these countries.

In this connection, Prof. Arthur Lewis has rightly stated, “No country has made progress without positive stimulus from intelligent government.” Thus to attain economic development at a quicker pace, proper maintenance of law and order and stability are very important.

e. Administrative Efficiency:

Economic development of a country also demands existence of a strong, honest, efficient and competent administrative machinery for the successful implementation of government policies and programmes for development. The existence of a weak corrupt and inefficient administrative machinery leads the country into chaos and disorder.

Prof. Lewis has rightly observed, “The behaviour of the government plays an important role in stimulating or discouraging economic activity.” Therefore, maintenance of proper administrative set up is a determinant of economic development of a country.

Essay # 3. Obstacles or Constraints on Economic Development:

The development process of an underdeveloped or developing economy is not an easy task rather it is a complicated one as these countries are not having any common characteristics. Thus the underdeveloped or developing countries are facing several constraints or obstacles to its path n economic development.

These Constraints on the path of economic development are of two types:

(a) Short-term constraints and

(b) long-term constraints.

These short-term constraints are related to over concentration and stagnation in agricultural sector, unemployment and under-employment, low productivity of capital, the growing deficit in its balance of payment position etc. Again, the long-term constraints include infrastructural bottlenecks, financial constraints etc.

The following are some of the important obstacles or constraints on the path of economic development of underdeveloped countries:

(i) Colonial Exploitation:

In the initial part of their development process, most of the underdeveloped countries were under foreign domination which had led to the huge colonial exploitation by the foreign rulers.

Foreign rulers converted these economies as primary producing countries engaged in the production of raw materials only to be supplied to the ruler country at cheaper prices and also a potent market for the sale of the manufacturing products produced by the ruler country.

Foreign capitalists mostly invested their capital on mining, oil drilling and plantation industries where they exploited the domestic workers to the maximum extent and remitted their profit to their parent country.

They have also destroyed the cottage and small industries by adopting unfair competition which has put a huge pressure on agriculture, disguised unemployment and poverty. After independence, these underdeveloped countries like India had to face serious obstacles to break this deep rooted impasse of low level equilibrium traps.

(ii) Market Imperfections:

Market imperfections in the form of immobility of factors, price rigidity, ignorance of market conditions, rigid social structure etc. have resulted serious obstacles in the path of economic development of underdeveloped countries. All these imperfections have resulted low level of output and low rate of productivity per worker.

Due to these market imperfections, resources of these countries mostly remain either unutilised or under­utilised leading to factor disequilibrium. This has forced the gross output of these countries for less than the potential output. Fig. 1.1 will clarify the situation.

Suppose the country is producing only two commodities A and B. The production possibility curve AB represents the production frontier which shows the various combinations of commodity A and B that may be produced by the country to its maximum extent through its fuller and best possible allocation of resources.

Thus AB represents the potential production curve. But the actual production curve of the underdeveloped country denoted by AB lies much below the potential production curve AB due to market imperfections resulting in misallocation and under-utilisation of resources in the country.

Thus due to market imperfections, the underdeveloped countries fail to reach the optimum production function due to lack of optimum allocation of resources.

(iii) Poor Rate of Savings and Investment:

Another important obstacle or constraint faced by the underdeveloped countries in their path of economic development is its poor rate of savings and investment. Inspite of their best attempt, the rate of savings of these underdeveloped countries remained very low, varying between 5 to 9 per cent only of their national income as compared to that of 15 to 22 per cent in the developed countries.

Under such a situation, the rate of investment in these countries is very low leading to low level of capital formation and low level of income.

(iv) Vicious Circle of Poverty:

Vicious circle of poverty is considered as one of the major constraints or obstacles to the path of economic development of the underdeveloped countries. Vicious circle in the underdeveloped countries represented by low productivity is resulted from capital deficiency, market imperfections, economic backwardness and poor development.

This vicious circle operates not only on demand side but also on supply side.

Low productivity results in low level of income and low rate of savings leading to low rate of investment, which is again responsible for low rate of productivity. Thus the vicious circle of poverty is resulted from various vicious circles related to demand side and supply side of capital. These vicious circles of poverty are mutually aggravating and it is really difficult to break such circles.

(v) Demonstration Effect:

Demonstration effect on consumption level works as another major obstacles or constraints on the path of economic development of underdeveloped countries as it increases propensity to consume and thereby reduces the rate of savings and investment.

Here the consumption level of individual is very much influenced by the standard of living or consumption habits of his neighbours, friends and relatives but not by its income alone.

Ragnar Nurkse has termed it ‘International Demonstration Effect’. He observed, “When people come into contact with superior goods or superior patterns of consumption, with new articles or new ways of meeting old wants, they are apt to feel after a while certain restlessness and dissatisfaction. Their knowledge is extended, their imagination is stimulated, new desires are aroused, the propensity to consume is shifted upward.”

Thus this international demonstration effect reduces the savings potential of the underdeveloped countries and thereby creates severe constraints on the path of their growth process.

(vi) Unsuitability in Adopting Modern Technology:

Underdeveloped countries are facing peculiar problem in respect of adopting modern and latest technology. Due to abundant labour supply and scarcity of capital, such technologies become unsuitable for these countries.

At the same time the existing poor technology of these underdeveloped countries fails to raise the rate of productivity and also to bring them out of the vicious circle of poverty and thereby makes it uncompetitive.

(vii) Rapidly Growing Population:

Most of the underdeveloped countries are facing the problem of rapidly growing population which hinders its path of economic development. In most of the over-populated countries of Asia and Africa, the rate of growth of population varies between 2 to 3 per cent which adversely affects their rate of economic growth and it is considered as the greatest obstacles to their path of economic development.

Jacob Viner has rightly observed, “Population increase hovers like a menacing cloud over all poor countries.”

Rapidly growing population slows down the rate and process of capital formation. Growing population increases the volume of consumption expenditure and thereby fails to increase the rate of savings and investment, so important for attaining higher level of economic growth.

Jacob Viner stated in this connection, “Population growth in a backward country does not induce capital widening investment or innovation. Instead it diminishes the rate of accumulation, raises costs in extractive industries, increases the amount of disguised unemployment and in large parts simply diverts capital to maintaining children who die before reaching a productive age. In short, resources go to the formation of population not capital.”

Moreover, rapidly rising population necessitates a higher rate of investment to maintain old standard of living and per capita income. Growing population also results food problem, unemployment problem which forced the country to divert its scarce resources to meet such crisis.

Thus, over-population results poverty, inefficiency, poor quality of population, lower productivity, low per capita income, unemployment and under-employment and finally leads the country toward under development.

(viii) Inefficient Agricultural Sector:

Another important obstacles or constraints to the path of development of underdeveloped countries are its inefficient agricultural structure. Agriculture dominates the economy of most of the underdeveloped countries like India as it is contributing the major share of their GDP.

Agricultural sector in these countries are suffering from primitive agricultural practices, lack of adequate inputs like fertilisers, HYV seeds and irrigation facilities, uneconomic holdings, defective land tenure and excessive dependence on agriculture.

Under such a poor structure, the agricultural productivity in these countries is very poor. Thus this poor performance of agricultural sector is another major obstacle in the path of economic development of these underdeveloped countries.

(ix) Inefficient Human Resources:

Inefficient and underdeveloped human resources are also considered another major obstacle towards economic development of underdeveloped countries. These countries suffer from surplus labour force but shortage of critical skills. Due to lack of adequate number of trained and skilled personnel, the production system remains thoroughly backward.

Thus this dearth of critical skills and knowledge in these countries has resulted under-utilisation and mis-utilisation of physical capital leading to lower productivity and higher cost structure of the production system. Due to lack of adoption of modern technique in agriculture, industry and trade, these underdeveloped countries fail to stand in the competition with developed countries.

(x) Shortage of Entrepreneurial Ability, Modern Enterprise and Innovation:

Underdeveloped countries are also suffering from lack of adequate number of entrepreneurial ability. Naturally there is absence of modern enterprise and proper managerial talent, Due to poor socio-cultural climate and weak environment, the managerial talent in these countries fails to reach its desirable level.

Moreover, due to the lack of spirit of experimentation and proper Research and Development (R&D) facilities, these underdeveloped countries fail to transform their production system to the desired level.

(xi) Inadequate Infrastructural Facilities:

Underdeveloped countries like India are facing serious obstacles due to inadequate infrastructural facilities. Thus the underdeveloped countries are suffering from lack of adequate transportation and communication facilities, shortage of power supply, inadequate banking and financial facilities and other social overheads which are considered very important for attaining economic development.

(xii) Adverse International Forces:

Certain adverse international forces are operating against the under­developed countries which are always going against the interest of the underdeveloped countries. International trade has forced the underdeveloped countries to become primary producing countries where the terms of trade as well as the gains from trade have always gone against these underdeveloped countries.

Prof. Raul Prebisch, Singer, Myrdal have formulated it “Theory of exploitation of poor countries”.

In this connection they observed, “During the last 150 years or so, the working of international forces through the media of trade and capital movement.” produced backwash effects on underdeveloped economies. There were certain disequalising forces operating in the world economy which made the gains from trade go mainly to developed countries.

(xiii) Political Instability:

Most of the underdeveloped countries are facing the problem of political instability resulting from frequent change of government, threats of external aggression and disturbed internal law and order conditions. This type of political instability creates uncertainty about its future steps and adversely affects the economic decisions of these underdeveloped countries relating to its investment.

Due to such uncertainty, flight of capital in considerable proportion takes place from these countries to advanced countries and also retards the chances of flow of foreign capital to these countries through foreign direct investment.

Moreover, weak and corrupt public administration in these countries has been resulting a huge leakage of public fund meant for investment in developmental activities.

(xiv) Inappropriate Social Structure:

Underdeveloped countries are suffering from backward social factors. Inappropriate social forces impeding the economic development of underdeveloped countries like India include prevalence of caste system, creating divergence between aptitudes, joint family system, peculiar law of inheritance, outdated religious beliefs, irrational attitudes towards number of children in a family etc.

All these social forces are obstructing the path of development of these underdeveloped countries.

Thus all these economic, political and social factors are equally responsible for the poor socio-economic set up of these underdeveloped countries and put serious obstacles for the path of economic development of these countries.

Essay # 4. Pre-Requisites or Need for Economic Development:

underdeveloped countries are very much concerned about their attainment of economic development. Attainment of economic development necessities a suitable environment for initiating, maintaining and accelerating the pace of economic development.

Prof. Lewis, in this connection, rightly observed, “The proximate causes of economic growth are: the effort to economise, the increase of knowledge or its application in production and increasing the amount of capital or other resources per head. these three causes, through clearly distinguishable conceptually are usually found together.”

Attainment of economic development in a country is very much related to social attitudes, political conditions, human resources, and also very much depending on psychological, social culture and political requirements of the country itself.

Prof. A.K. Cairncross has rightly observed that economic development “ is not just a matter of having plenty of money nor is it purely an economic phenomenon. It embraces all aspects of social behaviour, the establishment of law and order, scrupulousness in business dealing, including dealings with the revenue authorities, relationship between the family literacy, familiarity with mechanical gadgets and so on.”

Economic development of a country does not simply require removal of some of its basic obstacles like market imperfections, capital shortage, various circle of poverty etc. but it also requires a special attempt to identify some basic  forces related to economic development. Following are some of the important pre-requisites for economic development of underdeveloped countries.

(i) Peoples’ Desire for Economic Progress:

Peoples’ desire for the attainment of economic progress is the most important requirement of economic development. In order to attain a self-generating growth of the economy, the people of the country must have a strong and positive willingness to attain such development. In order to arouse such peoples’ desire, people of the country must be certain and well assured about the achievement of economic development:

(ii) Economic Organisation:

If the development strategy of the country is to be efficacious then it should be preceded by a proper economic organisation promoting such development and not hindering it any way. The economic organisation of the country should be of that type which can respond well to the requirements of planning for economic development.

A proper balance between the private and public sector initiatives is considered very important for evolving such an effective economic organisation. Thus in order to achieve fast economic progress, an underdeveloped country must attempt to introduce a rational reorganisation of its entire economy.

(iii) Removing Market Imperfections:

Removal of market imperfections is considered a very important pre-requisities for economic development as such imperfections create a lot of obstacles in the path of economic development of underdeveloped countries.

Market imperfection is largely responsible for wide spread poverty in such economies. Moreover, market imperfections results factor immobility, under-utilisation of resources and thereby abstract sectoral expansion and the process of development.

Removal of market imperfections can accelerate the pace of capital formation and can also widen the scope of capital and money market in these countries. The country should arrange cheap and larger volume of credit facilities readily available for its industrialists, cultivators, businessmen, small traders and new entrepreneurs.

Knowledge of these investors about market opportunities and new techniques of production should also be enhanced to the reasonable level. A whole hearted effort should be made to utilise its available limited resources in a most efficient and dynamic manner to its maximum extent.

In this connection, Prof. Schultz has rightly observed, “To achieve economic growth of major importance in such countries, it is necessary to allocate effort and capital to do three things: increase the quantity of reproducible goods, improve the quality of the people as productive agents and raise the level of productive arts.”

Thus the removal of market imperfections leads to an efficient allocation of resources which finally leads to advancement of industrial and agricultural production and also to expansion of foreign trade resulting an successful effort to break the vicious circle of poverty.

(iv) Reasonable Equality of Income:

Another pre-requisite for economic development of an under­developed country is the attainment of reasonable equality of income. Because this will generate adequate enthusiasm among, the general masses toward economic development of the country as well as for the successful working of the economic plan.

Growing concentration of income and wealth in the hands of few and political influence generally protects the richer section from higher rates of taxation and thereby the tax burden ultimately falls much on the middle class and poorer sections of the society.

Underdeveloped countries like India usually face this type of problem. Therefore, it is quite necessary mat proper steps be taken to check such concentration of wealth and they should attain reasonable equality in the distribution of income and wealth.

(v) Attaining Administrative Efficiency:

Existence of a stable strong, efficient and honest government machinery is considered another pre-requisite for economic development. In order to formulate and implement economic planning along with a specific policy for economic growth, the government must be strong and efficient one, capable of maintaining internal law and order and defending the country against any external aggression.

(vi) Indigenous Base:

The development process of underdeveloped countries must have a domestic or indigenous base and it is considered another major prerequisite for economic development. Whatever initiative is to be taken for the economic development, that should come from within the economy of these under­developed countries but not from outside.

Plan for economic progress and social betterment cannot be initiated from outside of a country. Some developmental projects may be developed out of foreign aid but it should be maintained, with indigenous motivation.

But too much dependence on external capital and external forces may dampen the spirit and initiative for development and paves the way for exploitation of natural resources of the underdeveloped countries by foreign investors. Thus to attain indigenous base in developmental framework is considered as an important pre-requisite for economic development.

(vii) Capital Formation:

In order to attain economic development in an underdeveloped economy, capital formation is considered as an important pre-requisite for development. In these countries, the rate of savings is low due to low per capita income and higher marginal propensity to consume. Thus immediate steps be taken to raise the rate of capital formation of the country.

These require:

(a) An increase in the volume of real savings,

(b) Establishment of proper credit and financial institutions for mobilising and channelising these savings into investible fund and

(c) Utilisation of these savings for the purpose of investment in capital goods.

Prof. Lewis has rightly observed, “No nation is so poor that it could not save 12 per cent of its national income if it wanted to, poverty has never prevented nations from launching upon wars or from wasting their substance in other ways.”

(viii) Determining suitable Investment Criterion:

To determine suitable investment criteria is also another major pre-requisite for economic development of underdeveloped countries. Here the idea is not only to determine the rate of investment but also the composition of investment. In order to determine an optimum investment pattern, it is essential to consider various fruitful avenues of investment available in these countries.

As social marginal productivity of investment differs thus investment should be made in those directions where its social marginal productivity is the highest.

The attainment of such higher social marginal productivity of investment requires—minimising the capital-output ratio, promoting greater external economies, investment in labour-intensive projects, use of domestic raw materials, reducing pressure on balance of payments and improving the pattern of distribution of income and wealth so as to reduce the gap between the rich and poor.

Moreover, investment in these countries should be channelised to build adequate social and economic overheads. Again the investment should be made to attain a balanced growth of different sectors of the economy. Finally, considering the structural environment in the country, proper choice of techniques be made for various investment projects of the country.

(ix) Absorption of Capital:

Another pre-requisite for economic development is to raise the capital absorption capacity of underdeveloped countries as they mostly suffer from lack of such capacity due to non-availability of co-operant factors. Such problems of low capital absorption capacity arise due to lack of technology, shortage of skilled personnel and poor geographical mobility of labour.

Thus with the increase in capital accumulation in such countries, the supply of other co-operant factors should be increased so as to enhance the capital absorption capacity of such countries.

(x) Maintaining Stability:

Underdeveloped countries are facing a peculiar problem of instability arising due to inflationary rise in price level. Inflation in these countries is influenced by the factors like monetary expansion, deficit financing, misdirection of savings in unproductive speculative activities, market imperfection: etc.

Therefore, another requirement of economic development is to maintain stability by avoiding inflationary rise in the price level so as to check mis-allocation of resources along with its other evils.

(xi) People’s Participation and Co-Operation:

Finally, people’s participation and public co-operation in all developmental projects are considered as an important pre-requisite and a principal force behind all planned developmental schemes of the under-developed countries. In the absence of public co-operation and participation, this development strategy cannot function properly.

Prof. W.A. Lewis observed, “Popular enthusiasm is both the lubricating oil of planning and the petrol of economic development—a dynamic force that makes all things possible.”

Therefore, planners should make an endeavour to enlist public co-operation and to arouse popular enthusiasm for implementing their plan for development. Moreover, in order to implement any developmental projects to the fullest extent and also to restrict the leakages involved in it, peoples’ participation and public co-operation are considered very important, especially in these under-developed countries.

Essay # 5. Structural Changes during Economic Development:

Attaining structural changes in the economy is considered as one of the pre-conditions for economic development.in most of the developed countries, economic growth is characterised by structural transformations of the economy.

The process of growth is connected with both fuller use of existing resources and expanding resources. Here the problem has to be tackled in two ways. Firstly, the productive opportunities available within the existing resouirce and necessary known-how have to be utilised to the maximum extent through optimum allocation of the resources of the country.

Secondly, the production frontier, i.e., the various productive sectors, has to be widened through sizable changes to the maximum extent.

Again the Chances of achieving higher rate of development through better allocation of existing resources is very much limited. T.W. Schultz has aptly observed, “in most poor countries there is not much economic growth to be had by merely taking up whatever slack may exist in the way of the available resources being utilised.” Therefore, in order to provide all outward push to the production frontier, the productive has to be expanded.

Moreover, the structural transformation of the economy indicates a shift away from agriculture to non-agriculture activities and from industry to services along with a change in the scale of productive units, and necessary shift from personal enterprises to impersonal organization of economic firms along with a change in the occupational status of labour. 

Following are some of the important structural changes arising out of economic development:

(i) Shift in Economic Activities:

In most of the underdeveloped agricultural countries, the structural change may be initiated through reduction in proportion of population engaged in agriculture and thereby increase in the number of persons engaged in non-agricultural occupations.

H.W. Singer observed that, “The speed or rate of economic development may then be described by the rate of which 70 : 30 ratio in economic structure is approximated to the 20 : 80 ratio which represents ultimate equilibrium at a high level of development.”

Therefore, the transfer of population from agricultural sector to non-agricultural sector must be supported by an increase in agricultural production so as to provide necessary food and raw materials to the non-agricultural sector as well as to meet the requirement of increasing population in both of these sectors.

In order to meet such requirement, there should be sufficient transformation in the agricultural sector in the form of introduction of land reform measures, raising the supply of productive inputs or factors in agriculture, promoting new credit institutions, introducing dynamic market structure, providing additional incentives, arranging changes in socio-economic relationships, introducing intensive cultivation process.

The development experience in various countries shows that the share of agricultural sector in GDP of all developing countries has declined excepting Australia. In respect of changes in the contribution of services sector, the result is not so marked or consistent among the various countries.

(ii) Changes in Sectoral Distribution of Labour Force:

Movements in structural transformations in economic growth can also be analysed in the form of changes in the distribution of labour force among three major sectors. The share of total labour force engaged in industrial sector varied between 40 to 58 per cent for almost all the countries excepting erstwhile USSR and Japan, as these countries entered lately in the field of industrialisation.

On the other hand, the share of total labour force engaged in the services sector remained almost constant and relatively poor in the countries like Australia, Great Britain, Sweden and Belgium. But the same share recorded an absolute and relative increase in the countries like USA, Canada, Italy, Japan, Switzerland and erstwhile USSR.

(iii) Changes in Sectoral Share in GDP:

Prof. Simon Kuznets has rightly observed that during the period of modern economic growth, the share of agriculture and agro-based industries in aggregate output (GDP) has recorded a sharp decline, while the shares of manufacturing industries, public utilities and certain service groups like professional, government etc. have recorded a manifold increase.

Such changes have resulted corresponding shifts in the sectoral allocation of labour force of the country. Moreover, the rapid change in the size and form of business organisations has also resulted a major structural change in the economy. Modern economic growth has resulted a fall in the domination of sole trading small farms.

Moreover, the shift away from agriculture to non-agricultural activities has also resulted a significant fall in the share of small business units. Again, the modern economic growth has also paved the way for the emergence of joint stock companies and giant corporations in modern industrial set-up.

(iv) Changes in Social Structure:

Finally, social system has much impact on the economic phenomenon of the country. Social institutions, habits and attitudes are influencing the productive activities and expenditure patterns substantially, especially in the underdeveloped countries. Savings and investment patterns are considerably influenced by cultural and social considerations.

Therefore, in order to attain structural change in the economy, there is the necessity of change in the social structure of its society. Setting a dynamic economy in a static social set up is almost impossible as they cannot pull together.

In this connection, Meir and Baldwin aptly observed, “New wants, new motivations, new ways of production, new institutions are to be created if national income is to rise more rapidly. Where there are religious obstacles to modern economic progress, the religion may have to be taken less seriously or its character altered.”

Thus necessary change in the social structure is very important for attaining economic development in a country. Prof. Gadgil also observed,

“All attitudes, habits of mind, patterns of behaviour, are born out of chiefly historical institutional modes of living. These modes of living in most under-developed countries have had in the past little direct connection with economic development. If now rapid economic development is to become the main objective of these societies, their attitudes and habits of mind must change correspondingly.”

Related Articles:

• Economic Development and Population
• Difference between Economic Growth and Economic Development
• Role of Government in Economic Development of a Country
• Essay on the Role of Banks in Economic Development

Urbanization and Developing Countries

Introduction.

In the past, the majority of individuals not only in developing nations but also in developed countries lived mostly in rural areas. However, with the advent of urbanization in addition to the ever-changing living patterns, most of the world populations have moved to areas they consider more urbanized. Although such movements have some advantages, in most cases, the negatives impacts or problems resulting from the same outweigh gains.

Such problems are more prevalent in developing countries because in most cases there is a lack of proper organization and control of such movements. Economic conditions of these countries have made the condition worse because the available infrastructure and resources cannot support such big numbers hence, the need for such governments to re-formulate mitigating measures to deal with such problems (Visaria & Jones, 2001, pp. 4-17).

Problems of Urbanization

In most cases, the majority of individuals view the problem of urbanization from the population growth perspective. However, it is important to note that, urbanization takes a wide scope because of its effects on the economic, social, political systems’ organization of a nation, more especially on urban centers. Also, the rapid increase in urban populations is the main factor behind the increased environmental degradation; a practice that is more prevalent in most developing nations’ towns.

For example, because of the poor settling patterns in most crowded areas, in most cases, such areas lack proper sewerage and drainage systems (Satterthwaite, Mitlin &Hardoy, 1992, pp.63-71). This translates to poor waste disposal methods, leading to many health complications, which in most cases cost the majority of these nations substantial amounts of money in alleviating them.

Health complications that can result due to poor wastage disposal systems include deadly diseases, for example, cholera, typhoid, and diarrhea. Such ailments not only cost these countries a lot of funds in dealing with them but also they weaken a country’s workforce hence, acting as a backward pooling force on economic and social development (Calvert & Calvert pp. 43-73).

Another problem of untamed population growth as a result of urbanization is the nature of strain such rapid growth cause on few available resources. Majority of individuals opt to settle in urban centers because of the prospects of good living lifestyles, for example, prospects of getting good jobs and other life-sustaining opportunities. In most cases, this is never the case in that, due to such influxes, in most cases, such resources are not sufficient to support livelihoods of all urban inhabitants; more so the poor and jobless.

In this like a scenario, many other problems are bound to arise ranging from urban planning to settlement problems, hence the increased communication problems in many urban towns (University of Michigan, 2002, para.15-17).

Urbanization in many ways also contributes to the escalated security problems in many developing countries. This is because, lack of a mechanism of earning livelihoods translates to the formation of many youth gang groups, which are major perpetrators of most crimes both in cities and other small town centers within most urban suburbs.

Lack of security is a major threat to the well-being of any society in that; governments are spending millions to beef up their security measures, a factor undermined by urbanization to some extent. This is the case primarily because; it is very hard to beef up security in an overcrowded city, where settlement patterns are so poor and disorganized.

On the other hand, poverty is a major impediment on development efforts in many developing countries. In common life scenarios, the majority of individuals attribute this problem to poor economic systems. However, it is important to note that, in many ways, urbanization has also contributed to the occurrence of the problem. Firstly, due to urbanization, individuals have neglected other sectors that are essential for economic development, for example, agriculture; because of the hope of better lives in towns.

Because of most countries’ economies are primarily dependent on agriculture, negligence of this sector of the economy may make a country to undergo economic turbulent times; hence; a poor citizenry. Secondly as concerns urbanization and elevation of poverty levels, because majority ty of individuals in towns lack ways of earning a living, most of them opt to live in slums; areas with the poorest living standards (United Nations Environmental Program; UNEP, 2010, p.1).

Another negative contribution of urbanization is the k of jobs. It is important to note here that, in addition to the increasing stress of on available resources, exaggerated population settlement in urban centers also strain the few job opportunities available in urban centers; a problem, which most developing countries are facing.

In addition to such strains, such population influxes can cause other labor problems for example misuse of workers, underpayment; something that translates in many political, socials, and economic problems such as frequent unrests and demonstrations.

In conclusion, although urbanization is one of the most important achievements a nation can have, it is important for all governments to formulate workable policies that will act as mitigating factors on problems, which may arise as a result of urbanization.

Reference List

Calvert, P., & Calvert, S. (2007). Politics and Society in the Third World (3rd e.d.). Essex, England: Pearson’s Education Limited.

Satterthwaite, D., Mitlin, D., &Hardoy, E. J. (1992). Environmental problems in Third world cities . London : Earthscan Publications limited. Web.

United Nations Environmental Program; UNEP. Urban issues. UNEP. Web.

University of Michigan. Urbanization and global change. Web.

Visaria, P. M., &Jones, G. W. (2001). Urbanization in large developing countries : Indonesia, Brazil, and India . Oxford: Oxford University Press. Web.

Cite this paper

• Chicago (N-B)
• Chicago (A-D)

StudyCorgi. (2020, April 13). Urbanization and Developing Countries. https://studycorgi.com/urbanization-and-developing-countries/

"Urbanization and Developing Countries." StudyCorgi , 13 Apr. 2020, studycorgi.com/urbanization-and-developing-countries/.

StudyCorgi . (2020) 'Urbanization and Developing Countries'. 13 April.

1. StudyCorgi . "Urbanization and Developing Countries." April 13, 2020. https://studycorgi.com/urbanization-and-developing-countries/.

Bibliography

StudyCorgi . "Urbanization and Developing Countries." April 13, 2020. https://studycorgi.com/urbanization-and-developing-countries/.

StudyCorgi . 2020. "Urbanization and Developing Countries." April 13, 2020. https://studycorgi.com/urbanization-and-developing-countries/.

This paper, “Urbanization and Developing Countries”, was written and voluntary submitted to our free essay database by a straight-A student. Please ensure you properly reference the paper if you're using it to write your assignment.

Before publication, the StudyCorgi editorial team proofread and checked the paper to make sure it meets the highest standards in terms of grammar, punctuation, style, fact accuracy, copyright issues, and inclusive language. Last updated: December 19, 2023 .

If you are the author of this paper and no longer wish to have it published on StudyCorgi, request the removal . Please use the “ Donate your paper ” form to submit an essay.

You are using an outdated browser. Upgrade your browser today or install Google Chrome Frame to better experience this site.

• IMF at a Glance
• Surveillance
• Capacity Development
• IMF Factsheets List
• IMF Members
• IMF Timeline
• Senior Officials
• Job Opportunities
• Archives of the IMF
• Climate Change
• Fiscal Policies
• Income Inequality

Flagship Publications

Other publications.

• World Economic Outlook
• Global Financial Stability Report
• Fiscal Monitor
• External Sector Report
• Staff Discussion Notes
• Working Papers
• IMF Research Perspectives
• Economic Review
• Global Housing Watch
• Commodity Prices
• Commodities Data Portal
• IMF Researchers
• Annual Research Conference
• Other IMF Events

IMF reports and publications by country

Regional offices.

• IMF Resident Representative Offices
• IMF Regional Reports
• IMF and Europe
• IMF Members' Quotas and Voting Power, and Board of Governors
• IMF Regional Office for Asia and the Pacific
• IMF Capacity Development Office in Thailand (CDOT)
• IMF Regional Office in Central America, Panama, and the Dominican Republic
• Eastern Caribbean Currency Union (ECCU)
• IMF Europe Office in Paris and Brussels
• IMF Office in the Pacific Islands
• How We Work
• IMF Training
• Digital Training Catalog
• Online Learning
• Our Partners
• Country Stories
• Technical Assistance Reports
• High-Level Summary Technical Assistance Reports
• Strategy and Policies

For Journalists

• Country Focus
• Chart of the Week
• Communiqués
• Mission Concluding Statements
• Press Releases
• Statements at Donor Meetings
• Transcripts
• Views & Commentaries
• Article IV Consultations
• Financial Sector Assessment Program (FSAP)
• Seminars, Conferences, & Other Events
• E-mail Notification

Press Center

The IMF Press Center is a password-protected site for working journalists.

• Login or Register
• Information of interest
• About the IMF
• Conferences
• Press briefings
• Special Features
• Middle East and Central Asia
• Economic Outlook
• Annual and spring meetings
• Most Recent
• Most Popular
• IMF Finances
• Additional Data Sources
• World Economic Outlook Databases
• Climate Change Indicators Dashboard
• IMF eLibrary-Data
• International Financial Statistics
• G20 Data Gaps Initiative
• Public Sector Debt Statistics Online Centralized Database
• Currency Composition of Official Foreign Exchange Reserves
• Financial Access Survey
• Government Finance Statistics
• Publications Advanced Search
• IMF eLibrary
• IMF Bookstore
• Publications Newsletter
• Essential Reading Guides
• Regional Economic Reports
• Country Reports
• Departmental Papers
• Policy Papers
• Selected Issues Papers
• All Staff Notes Series
• Analytical Notes
• Fintech Notes
• How-To Notes
• Staff Climate Notes

IMF Working Papers

The pitfalls of protectionism: import substitution vs. export-oriented industrial policy.

Author/Editor:

Reda Cherif ; Fuad Hasanov

Publication Date:

April 26, 2024

Electronic Access:

Free Download . Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Industrial policies pursued in many developing countries in the 1950s-1970s largely failed while the industrial policies of the Asian Miracles succeeded. We argue that a key factor of success is industrial policy with export orientation in contrast to import substitution. Exporting encouraged competition, economies of scale, innovation, and local integration and provided market signals to policymakers. Even in a large market such as India, import substitution policies in the automotive industry failed because of micromanagement and misaligned incentives. We also analyze the risk tradeoffs involved in various industrial policy strategies and their implications on the 21st century industrial policies. While state interventions may be needed to develop some new capabilities and industries, trade protectionism is neither a necessary nor a sufficient tool and will most likely be counterproductive.

Working Paper No. 2024/086

9798400270802/1018-5941

WPIEA2024086

Please address any questions about this title to [email protected]