30 - Barriers to Development

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15 Terms

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Debt repayments

________ cause a major drawbacks to money borrowed previously.

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Capital fight

________: is the movement of large sums of money out of a country as a reaction to political or economic instability.

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High income inequality

________ can be a barrier to growth and development for a number of reasons.

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Poverty trap

________ (poverty cycles): any linked combination of barriers to growth and development that forms a circle, thus self- perpetuating unless the circle can be broken.

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Price elasticity of demand

________ for commodities and price elasticity of supply commodities to be relatively inelastic.

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Corruption

dishonest exploitation of power for personal gain

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landlocked countries

those surrounded by other countries with borders, trade less and have slower growth rate

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ineffective taxation structure

tax revenue provides governments with means of finance

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lack of good governance:

corruption, political instability, unequal political power

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political barriers to development:

  • legal systems and property rights

  • right to own assets

  • right to sell, benefit from, and establish assets

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social barriers to development:

  • ineffective tax structure

  • banking system (rival banks in different countries)

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ineffective tax structure:

tax revenue provides governments with means of finance

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Means of development

is a process that creates growth, progress, positive change or the addition of physical, economic, environmental, social and demographic components.

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Poverty trap (poverty cycles)

any linked combination of barriers to growth and development that forms a circle, thus self-perpetuating unless the circle can be broken

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Capital fight

is the movement of large sums of money out of a country as a reaction to political or economic instability