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Barriers to Economic Growth and Economic Development - Coggle Diagram
Barriers to Economic Growth and Economic Development
Poverty Cycles (traps)
Arises when low incomes result in low/zero savings, allowing only low investment in capital leading to low productivity of labour and land. Therefore, there will be low income growth (perhaps even none), once again resulting in low incomes.
Poverty cycles may occur in families, communities, part of the economy or the economy as a whole.
Poverty cycles cause poverty to be transmitted from generation to generation.
People may not be able to send their children to school
People cannot afford necessary medical care for themselves or their children or cannot afford enough food.
People have large families because they see children as a source of additional income or old age support. Large families increase poverty since income is stretched to cover the needs of more people.
Breaking out of the poverty cycle
Requires intervention from the government to undertake investments; Unless the government is caught in the poverty cycle in which case escape is possible if resources are provided through foreign aid.
Economic Barriers
Economic Inequality
Limited Access to Infrastructure
Limited Access to Appropriate Technology
Low Levels of Human Capital
Dependence of Production and Exports on Primary Sector
Limited Access to International Markets
Informal Economy
Capital Flight
Indebtedness
Geography and Landlocked Countries
Tropical Climates and Endemic Diseases
Political and Social Barriers
Weak Institutional Framework
Ineffective Taxation Structures
Undeveloped Banking
Property Rights and Land Rights
Gender Inequality
Inappropriate Governance
Corruption
Unequal Political Power and Status
