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TOPIC 4: Characteristics of Developing Countries and Global Living Standards

Characteristics of Developing Countries

Overview

This topic explores the common characteristics that define developing countries and examines whether global living standards are converging. We will compare developing countries today with developed countries at the start of the industrial revolution, focusing on ten key characteristics and six types of convergence.

Ten Common Characteristics of Developing Countries

1. Low Levels of Living and Productivity

Developing countries exhibit significantly lower levels of living and productivity compared to developed nations. Data from Todaro and Smith (2015) in 2008 highlighted that these countries hold a minimal share of global income. Output per worker, when measured in constant 2005 PPP-adjusted international dollars, is also substantially lower in developing regions, indicating a less efficient and less productive workforce.

2. Low Levels of Human Capital

Human capital, which includes health, education, and skills, is generally low in developing countries. Key indicators include:

  • Child (Under-5) Mortality: In 1990, low-income countries experienced very high child mortality rates, potentially exceeding 160 deaths per 1,000 live births. While rates have generally declined by 2012 across all income groups, low-income countries still lag significantly behind high-income countries, which saw rates below 20 deaths per 1,000 live births.
  • Primary Enrollment and Student-Teacher Ratio: These indicators reveal challenges in educational access and quality. Low enrollment rates and high student-teacher ratios (sometimes exceeding 40 students per teacher in low-income populations, compared to less than 20 in high-income countries) point to insufficient investment in education.
  • Correlation of Child Mortality and Maternal Education: There is a strong negative correlation, meaning that higher levels of maternal education are associated with significantly lower child mortality rates, underscoring the importance of female education for health outcomes.

3. High Levels of Inequality and Absolute Poverty

Developing countries often suffer from stark income inequality and widespread absolute poverty. Millions of people in these regions live below the poverty line. Regions like Sub-Saharan Africa and South Asia continue to have a large number of poor individuals, as illustrated by data on the number of poor by region (Todaro and Smith, 2015).

4. High Population Growth

Developing countries typically experience high crude birth rates (live births per 1,000 people), leading to rapid population growth. For example:

  • Countries like Chad, Democratic Republic of Congo, Mali, Niger, Uganda, and Zambia have crude birth rates above 45 per 1,000 people.
  • Afghanistan, Angola, Benin, Burkina Faso, Liberia, Malawi, Mozambique, Nigeria, Somalia, South Sudan, and Tanzania generally exhibit rates between 40-44.
  • In contrast, developed countries such as Austria, Croatia, Germany, Hungary, Italy, Japan, South Korea, Serbia, Portugal, and Taiwan have rates below 10 per 1,000 people. This demographic pattern places significant strain on resources and development efforts.

5. Social Fractionalization

Many developing countries are characterized by high social fractionalization, meaning they have diverse ethnic, linguistic, and religious groups within their national borders. This diversity, while potentially a source of richness, can also lead to social and political instability, governance challenges, and conflict, as evidenced by maps of African and Middle Eastern ethnic geography (Harvard University Center for Geographic Analysis, 2019; Fisher, 2015).

6. Larger Rural Populations and Fast Urbanization

Developing countries generally have larger proportions of their populations living in rural areas compared to developed countries. However, they are also experiencing rapid urbanization. For instance, in 2009:

  • Less developed countries had an urban share of 44\%, compared to 75\% in more developed countries.
  • Regions like Sub-Saharan Africa had an urban share of 35\%, while Latin America and the Caribbean had a 77\% urban share. This rapid shift brings both opportunities and challenges, such as demand for infrastructure and services.

7. Lower Levels of Industrialization

Developing countries typically have lower levels of industrialization, with a significant share of their GDP and employment still concentrated in agriculture. For example, in many African and South Asian countries, the agriculture sector's share of GDP and male/female employment is considerably higher than in developed countries like the United Kingdom or the United States, where services and industry dominate.

8. Adverse Geography

Geographical factors often pose significant barriers to development:

  • Landlocked Countries: These countries typically fare worse economically than those with direct access to a coast due to higher trade costs.
  • Tropical Diseases: Developing regions are often exposed to unique tropical diseases, such as malaria (as shown by global malaria distribution maps from CDC, 2022), which severely impact public health and labor productivity.
  • Climate Change Impact: Africa and South Asia are projected to be hit hardest by the effects of climate change, exacerbating existing vulnerabilities.
  • Continental Orientation: The N-S orientation of continents like Africa and Latin America can limit the spread of agricultural innovations and technologies compared to E-W oriented continents.

9. Weak Institutions and Under-Developed Markets

Weak institutions and underdeveloped markets are perennial challenges. Institutions provide the