Gr. 12 Canadian and World PoliticsCauses of Development Disparity

SixFactors:

1.Geographical(Location)

a. TropicalRegions

• mostdevelopingcountriesarelocatedinthetropics• intheabsenceofairconditioningtechnology,discourageworkandhavehighratesofinfectiousdisease,reducinglabourproductivity

• excessivemoisture,drought,disease,andpoorqualitysoils(outsidevolcanicregions,rivervalleys,anddeltas)limitagriculturalproductivity

Gr. 12 Canadian and World PoliticsCauses of Development Disparity

Brandt LineNorth-South

Divide

Tropics

Gr. 12 Canadian and World PoliticsCauses of Development Disparity

b.DistancefromtheCoast

• countriesfarfromthecoastlineorwithlimitedaccesstonavigablewaterwaysshowslowerratesofeconomicgrowth

• duetohigherratesoftransportationcostsinaccessingworldmarkets

• acountrywhosepopulationisfartherthan100kmfromtheseagrows0.6%slowerthanthosewheretheentirepopulationiswithinthisdistancefromthecoast

World’sLandlockedCountries

Gr. 12 Canadian and World PoliticsCauses of Development Disparity

EconomicPerformanceofLandlockedCountries

Gr. 12 Canadian and World PoliticsCauses of Development Disparity

2.Historical

a. ColonialExperience

• developingcountrieswereatonetimecoloniesofdevelopedcountriesandmanyoftoday’sillsareblamedonthelegacyofexploitationbytheimperialpowersofEuropeandtoalesserextent,theUnitedStates

Gr. 12 Canadian and World PoliticsCauses of Development Disparity

b.StageofDevelopmentProcess

• poorcountriesGinditdifGiculttocompetewithrichcountriesinpartbecauseofthe‘HeadStartFactor’

• thatis,whenrichcountriesbegantheirdevelopmentprocess,itwasmucheasierthantodayrequiringfewerresources,simplertechnology,lesscapital,minimallabourskills,andrestrainedbyfewergovernmentregulations

3.Economic•factorsincludecapitalshortage,lowlabourproductivity,andlack

oftechnology,knownastheViciousCircleModelofPovertyLow Incomes

Low Savings

Low Investment

Low Stock of Capital

Low Productivity

Low Output

(especially technology)

Gr. 12 Canadian and World PoliticsCauses of Development Disparity

b.ForeignDebt

• Backinthe1960sand1970s,manyLDCstookoutloansfromMDCsusingtheircashcropsascollateral

• sincethen,thevalueofcashcropshassteadilydeclined• thishadmadeitmuchmoredifGiculttopaybackdebtswhichhavesincegrownsigniGicantly

• manyLDCscannotintroduceimprovementsduetothecostofpayingofftheirdebt

Gr. 12 Canadian and World PoliticsCauses of Development Disparity

c.TradeInequitiesEconomicdisparitybetweencountriesbecomesblatantlyobviouswhencomparingthevalueofeconomicgoodsproduced:

• computerdesign,softwaredesign,marketing,etc.thattakeplaceinMDCsisofgreatervaluethantheelectronicsandcomputersmanufacturedinNewlyIndustrializingCountries(NICs);

• computersandelectronicsproducedinNICsareofgreatervaluethanthecashcropsproducedinLDCs;

• withcashcropsdroppinginvalue,whateffectwouldthishaveondisparity?

Gr. 12 Canadian and World PoliticsCauses of Development Disparity

4.Social

a. PopulationProblems

• rapidgrowth,highdependencyloads,urbanizationfocusesattentiononcurrentneedstakingawayresourcesfrominvestmentinthefuture

• levelsofeconomicgrowthrequiredtomeetneedsofpopulationnowandinthefutureisunrealistic

E.g.Ifacountry’spopulationgrowsby2.5%peryear‐howdoesthisaffectdisparity?• topreventdisparitywithinthecountryfromgrowinganylarger,theeconomy,jobs,healthcare,education,cleanwater,sewage,etc.,etc.,etc.,mustalsogrowby_____%

Gr. 12 Canadian and World PoliticsCauses of Development Disparity

b.HealthLevelsandEducationalAchievement

• lowlevelsofbothhealthandeducationtypicalofdevelopingcountriesadverselyimpactslabourproductivity

c.ClassStructure•socialmobility,arequisiteformodernizationisrestrictedin

countrieswithrigidclassstructures•InLatinAmerica,smallprivilegedeliteexerciseallpoliticaland

economicpower•InIndia,aperson’slotinlifedeterminedbywhatevercastethey

happentohavebeenborninto

Gr. 12 Canadian and World PoliticsCauses of Development Disparity

d.StatusofWomen

• tendtobelimitedtotraditionalroleswhichineffectmeansthathalfthepotentiallyproductivelabourforceisrestrictedfromparticipatingintheeconomicdevelopmentoftheirsocieties

e.KinshipGroups•allegiancetofamilies,clans,ortribescanstandinthewayof

economicprogress,whichrequiresfreedomofactionsforindividuals‐averycommonprobleminnon‐westernworldwhichencompassesamajorityofworld’spoor(e.g.Afghanistan)

Gr. 12 Canadian and World PoliticsCauses of Development Disparity

5.Political

a.PoliticalDivision

• mostnewnations(mainlythosecreatedfromthebreak‐upEuropeanEmpiresinLatinAmerica,Asia,andAfrica)haveonlyweaknationalidentitiesaspoliticalloyaltiesremainforolderinstitutionsdeGinedbyrace,ethnicity,religion,language,ortribenotcountry

• detrimentaltodevelopmentbecauseitmakesconsensusonsocio‐economicpolicynexttoimpossible

b.PoliticalInstabilityandCorruption•wherepoliticaldivisionisseverecountriestendtobeunstable

andvulnerabletocoups•dictatorshipandarbitraryruleintheinterestofthoseinpower

andendemiccorruptionalmostinevitablyfollow(antithesisof‘peaceorderandgoodgovernment’necessaryforinvestment)

Gr. 12 Canadian and World PoliticsCauses of Development Disparity

6.Cultural

a.ReligiousBeliefs

• historyofeconomicdevelopmentintheWestshowsadirectlinkbetweenmodernizationandtheprevailingbeliefsoftheirsocieties

• ProtestantismversusCatholicism• Non‐westernbeliefsin‘fatalism’notconducivetoeconomicgrowthanddevelopment

b.CustomsandTraditions•traditionalvalues(suchastheprohibitioninterestpaymentson

moneyborrowed)canbestrongdisincentivestodevelopment