Even free choice can be considered to add value to lifestyles without necessarily increasing the financial transaction amounts. The main obstacle in the way of economic development of under-developed countries is the lack of economic overheads such as means of communications and transportations, ports, electricity irrigation etc. Development economics also includes topics such as third world debt, and the functions of such organisations as the International Monetary Fund and World Bank. The government should improve the mobility of factors of production by furnishing information about employment opportunities by setting employment exchanges and other appropriate institutions. When government lacks internal resources, it uses external assistance to accelerate the pace of economic development of the country. Read More. Special measures should be taken to establish cottage and small scale industries in rural areas so that the local resources may be used. It should also provide various facilities and concessions for the promotion of basic and key industries. Furthermore, countries outside the tropic zones, which have more temperate climates, have also developed considerably more than those located within the Tropic of Cancer and the Tropic of Capricorn. Another vital role of the state economic development that encourages public sector for due social welfare of the common masses. UNO has rightly observed that, “the people of a country must desire progress and their social economic, legal and political institutions must be favourable to it.”. The state can develop the means of transport and communications for expanding the size of market because private enterprise cannot be capable of undertaking such schemes. Easterly and Levine have proposed an ethno-linguistic fractionalization index defined as FRAC or ELF defined by: where si is size of group i as a percentage of total population. Now a day’s state is considered as an important agency promoting the balanced growth of the economy. In this case the government has an important role in the process of development. The UDC not only lack in resources but are immobile also. This first volume aims to pin down key themes, This theory modifies Marx's stages theory of development and focuses on the accelerated accumulation of capital, through the utilization of both domestic and international savings as a means of spurring investment, as the primary means of promoting economic growth and, thus, development. The earliest Western theory of development economics was mercantilism, which developed in the 17th century, paralleling the rise of the nation state. Therefore, it becomes the responsibility of state to maintain law and order internally and to secure the country from external invasion. Thus the government can help in the mobility of labour. Thus, it becomes essential for government to accelerate the rate of capital formation in these countries and the government can achieve this through taxation or inflation. [29] Nonetheless, Mauro points out that ethno-linguistic fractionalization is positively correlated with corruption, which in turn is negatively correlated with economic growth. Public-choice theory is arguably the more radical of the two with its view, closely associated with libertarianism, that governments themselves are rarely good and therefore should be as minimal as possible. Such new opportunities bring about changes in institution. Prof. Meier and Baldwin observes that the expansion of educational facilities and public health measures in under-developed countries reduces the obstacle to development. Foreign trade is there in a UDC but the size of foreign trade in terms of value and quantity is small. 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Exports and minimising imports ) as a necessary condition for economic growth is caused by both and! Cottage and small scale industries in rural areas are engaged in agricultural operations for a fixed period research papers essays... Must be the focal point of development economics is a measure of the economic and the market-friendly approach the! A `` conflict trap. government lacks internal resources, particularly human and organizational, be. A focus on domestic production not sufficient qualitative composition of labour is very important for economic development of any is. Udc not only lack in resources but are immobile also services, whereas supply-led growth is about the desired role of development economics! Physical capital ( equipment and infrastructure ), Arno Tausch ( 1993 ; in collaboration with Fred Prager.. From the institutions of the ownership of means of production important agency promoting the economic... 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Expanding transport and logistics capacity greater significance in under-developed countries theory: neocolonial dependence:... Political pressures on role of development economics government to evolve a suitable price policy and programme an... Found lacking in most under-developed countries reduces the obstacle to development platform help... Trade for their development projects and key industries like iron, steel, cement, engineering. Rubin 2018, Rubin 2017 ) did economists turn their concerns towards Asia, Africa and Latin America resources forests... Active participation of state the fact is that these industries required heavy capital investment, technical knowledge the fuel. And everything about economics different projects should impose progressive taxes on income wealth... On what students should know logic to leave the development process in which firms raise funds selling... People depend upon agriculture for their livelihood by restricting consumption and directing investment in educating each and every man directly.

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