Assess the significance of three factors which might limit economic

development in developing countries

Corruption and war bribery, and diversion of resources by government this

is an inefficient allocation of resources and restrains development. Government
officials embezzle money rather than spend it on public services or investment.
This will deter aid. Civil war means government resources are diverted towards
arms, e.g. Sudan, therefore disrupting growth and development and destroying
the infrastructure and people. War and corruption also deter investment.
However, political instability may not be an inherent component of all developing
countries and even if political instability does exist, the extent to which it is a
problem would vary amongst the developing countries. For example there is
much less corruption in Brazil than there is in Bangladesh therefore Bangladeshs
development is likely to be much more limited in comparison to Brazils, despite
the fact that corruption may persist within both countries.

Primary product dependency

Comparative advantage means exports one g/s, imports everything else,

so very dependent on one commodity, e.g. Botswana almost 100% dependent on
diamond exports. A natural disaster could ruin the whole crop.

Price fluctuations deter investment and mean farmers cannot invest and
plan for the future, to get the best of their harvest. Very inelastic supply and
demand curves mean that prices are very volatile

Capital-intensive farming this is to provide for the world market, often by

MNCs. Export prices rise so locals cannot afford food, leading to unemployment
and falling living standards. Should enforce redistribution of land, and encourage
labour intensive farming to make distribution of income equal.
However, the extent to which primary product dependency may inhibit economic
development is somewhat limited. For example, if the price of a countrys
primary product is rising, then this would encourage development. Some
countries have even developed on the basis of primary products, for example
Botswana: diamonds; (however, in the case of Botswana, its development may
also be due to its political stability, thus allowing for resources to be allocated
efficiently).

Education - a huge investment in human capital through education has allowed

China to shift out its PPF. Countries with little education investment and low
school enrolment are likely to have low productivity and little economic growth. It
will mean more foreign direct investment in the future as firms will not have to
train workers.