Why are some countries developed and others under-developed
Answers
Answer:
Economic factors - some countries have very high levels of debt . This means that they have to pay a lot of money in interestand repayments and there is very little left over for development projects. Environmental factors - some places experience environmental issues, which can prevent them from developing.
Answer:
One puzzle of the world economy is that for 200 years, the world’s rich countries grew faster than poorer countries, a process aptly described by Lant Pritchett as “Divergence, Big Time.” When Adam Smith wrote The Wealth of Nations in 1776, per capita income in the world’s richest country – probably the Netherlands – was about four times that of the poorest countries. Two centuries later, the Netherlands was 40 times richer than China, 24 times richer than India, and ten times richer than Thailand.
But, over the past three decades, the trend reversed. Now, the Netherlands is only 11 times richer than India and barely four times richer than China and Thailand. Spotting this reversal, the Nobel laureate economist Michael Spence has argued that the world is poised for The Next Convergence.
Yet some countries are still diverging. While the Netherlands was 5.8, 7.7, and 15 times richer than Nicaragua, Côte D’Ivoire, and Kenya, respectively, in 1980, by 2012 it was 10.5, 21.1, and 24.4 times richer.
What could explain generalized divergence in one period and selective convergence in another? After all, shouldn’t laggards grow faster than leaders if all they have to do is imitate others, even leapfrogging now-obsolete technologies? Why didn’t they grow faster for so long, and why are they doing so now? Why are some countries now converging, while others continue to diverge?
There are potentially many answers to these questions. But I would like to outline a possible explanation that, if true, has important implications for development strategies today.