Drivers of Development: Economic, Environmental, Political, Social & Institutional
Factors Impacting Development
1. Economic Factors
- Debt: Developing countries often carry "third world debt", diverting resources from development to debt repayment.
- Infrastructure: Investments in transport, energy, etc., boost productivity, connectivity, and inclusion. Example: China’s Belt and Road Initiative.
- Geography: Landlocked countries (e.g., Uganda) face trade barriers due to lack of sea access.
- Resources: Resource-rich countries may underdevelop (e.g., DRC) due to mismanagement, known as the "resource curse".
2. Environmental Factors
- Environmental Damage: Infrastructure (e.g., oil drilling) can cause disasters (e.g., Deepwater Horizon).
- Climate Change: Rising sea levels, floods, and droughts displace populations, reduce food security, and worsen inequality.
- Pollution and Location: Industrial projects can reduce quality of life. Geographic disadvantages (e.g., isolation) limit development.
3. Political Factors
- Instability: Conflict and coups deter investment and reduce continuity (e.g., coups in Mali, Guinea).
- Ideologies: Systems like North Korea’s Juche prioritize self-reliance but limit economic cooperation.
- Corruption: Undermines trust, lowers tax revenue, reduces foreign investment (e.g., Nigeria collects only 8% of GDP in taxes).
4. Social Factors
- Culture and Values: Cultural tourism and heritage can contribute economically (e.g., £3.2B to London in 2013).
- Gender Discrimination: Limits half the population's economic contribution, inheritance and access to education often biased (e.g., Malawi).
- Migration: Brain drain harms origin countries, remittances (e.g., $630B globally in 2022) are vital to development.
5. Institutional Factors
- Global Institutions: IMF and World Bank offer loans with Structural Adjustment Programmes (SAPs), which often cut public spending.
- National Institutions: Local institutions (e.g., farming co-ops, microfinance) empower communities.
- Global Cooperation:
- North-South: Aid from developed to developing nations.
- South-South: Knowledge and skills sharing (e.g., Cuba’s Ebola response).
- Triangular: Global North and South collaborate (e.g., Japan supporting Cambodia-Colombia project).
Case study
Zambia: Economic and Political Factors Impacting Development
- Context: Zambia is a landlocked country in Southern Africa heavily reliant on copper exports (about 70% of export earnings). This creates vulnerability to global price fluctuations (economic factor).
- Key Factors:
- Economic: Commodity dependence on copper has led to a lack of economic diversification. A fall in copper prices often leads to recession and reduced government revenue.
- Political: Zambia has experienced political instability and corruption. Allegations of misuse of public funds have discouraged foreign investment.
- Institutional: The country relies heavily on international institutions like the IMF and World Bank, receiving loans often tied to structural adjustment programs.
- Environmental: Zambia faces challenges from climate change, including droughts that threaten agriculture and hydropower generation.
- Social: High poverty rates and limited access to quality education and healthcare hinder human capital development.
Self review
- How does debt hinder a country’s ability to invest in development?
- How do political instability and corruption affect development efforts?
- In what ways can geographic location affect a country’s development prospects?
