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Political and social barriers to development - Coggle Diagram
Political and social barriers to development
Lack of good governance and corruption
Political instability
No control in the coutry
Creates corruption
Wars
Poor health
problems with transportation
Prevents exports and imports
Decreases GDP
No development
Bad relations with other countries -> trading barriers
Prevents investments and savings because people are not confident about the future of the country
GDP decrease -> country has less money
No development
Loss of human capital-> lower productivity
Unequal political power and status
If it is one party controls government:
One perspective according ideology
No balance and different interpretations of the economical problems and solutions
One leader means power concentrated in one hands -> dangerous according to history
Gender inequality
If president is man he decides everything for women -> unequal distribution of power affects other social groups, genders, ages etc.
Corrruption
Unfair distribution of wealth
Creates even more inequality between people -> those who have motives and access to earn money from corruption are rich
no development
Prevents government investment into the infastructure
Poor education
no development
Poor health
no development
Undermining public trust in government
Social imbalance
People can refuse to work, pay taxes etc
Inefficiency
no development
Gender inequality
In many countries, women and men are not equal.
By eliminating the inequality, positive economic development could be achieved.
For women themselves, there would be economic development through greater education and improved social standing.
By poor education, womeen are not aware of health care, hygiene and diet, which leads to a shrinking condition in the welfare of the family.
If women are not educated, they cannot pass the knowledge to their children. Also, they are not able to strive their children to educate themselves.
If these are not achieved, there will not be improvement in the workforce, and thus, no growth and development.
If women do not get more empowerment, they will not earn more money. Hence, there might not be increases in health levels of families. If men earn more, the improvement in health levels of families does not improve at the same rate compared to the increases in women's incomes.
If there is no education and good social standing for women, they do not have too much control over contraception, and cannot marry later. Hence, they will not have smaller families, and the rate of population growth will keep increasing.
Weak institutional framework
Legal system and property rights
Often times in developing countries there are quite a few legal issues. These can include the following
No way to uphold property rights
Property rights enable people to own and benefit from private property. For example: sell assets or exclude others from using or taking over the assets
In developing countries, due to the lack of these rights, purchased properties become "dead capital" meaning that it will become increasingly difficult to buy or sell.
Economist Hernando De Soto argues that the lack of these property rights traps people in developing countries in property
Lack of ability to create and enforce contracts
Ineffective taxation structure
A functional taxation structure is essential, as this provides the government with revenue to fund necesary public services such as education and health care, as well as improve the general infrastructure of the country.
This is difficult to govern in developing countries due to some of the following reasons.
The main source of tax revenue for developing countries comes from export, import and customs duties
Easy to collect due to the tax being paid when goods pass through the countrys borders
Effective only for countries heavily involved in trade (problem for developing countries)
The size of the informal market
The larger the informal market, the lower the tax revenue for the government. Often the size of informal markets as a % of GDP is far greater in developing countries than developed countries.
Lower tax revenues also make it harder for governments to promote growth and achieve development objectives
Tax exemptions and innefficient or corrupt administration
It is estimated that less than 3% of the population in developing countries pay income tax, as opposed to the 60-80% in developed countries
Corporate tax revenues tend to be low due to the small amount of corporate activity in developing ocuntries (Though this is growing)
Banking system
Developing countries usually lack a traditional form of banking system
This is due to the following: Lack of assets to use as collateral, the people oftentimes being uneployed and a lack of savings
The difficulties associated with saving and borrowing money are a significant barrier to economic growth and development.
"Unofficial" markets
Not legally controlled and thus illegal
Mainly lend money at very high interest rates to those who are desperate and poor enough to have to borrow it