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Section 2 Issues in Development

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Objectives

After studying this section you will be able to:

1. Identify the causes and effects of rapid population growth.
2. Describe the effects of the unequal distribution of the factors of production.
3. Understand the importance of human capital to development.
4. Analyze how political factors and debt are obstacles to development.

Section Focus

Less developed countries face a variety of complex issues. These include rapid population growth, a lack of natural resources, inadequate quantities of physical and human capital, political instability and government corruption, and debt.

Key Terms

• population growth rate
• natural rate of population increase
• arable
• malnutrition

If you were an official in the government of a less developed country, you'd quickly discover that there are no easy solutions for ending decades of underdevelopment. The fortunate discovery of oil, diamonds, or some other valuable natural resource could certainly help. Natural resources, however, are but one factor in development.

South Korea grew rapidly after the Korean War. Its capital, Seoul, became one of the world's largest cities.

Rapid Population Growth

One of the most pressing issues in development is the rapid population growth experienced by many less developed countries. Some economists point out that a population's quality of life depends on economic productivity, not on population density. Very dense populations can have rising living standards where free markets foster growth. Nevertheless, the already poor economies of many LDCs have trouble meeting the needs of rapidly growing populations.

Causes of Rapid Population Growth

The population growth rate is the increase in a country's population in a given year. It is expressed as a percentage of the population figure at the start of the year. The population growth rate takes into account the number of births, deaths, and the number of people migrating to or from a country.

When analyzing population growth in less developed countries, development experts often focus on the natural rate of population increase. This is the difference between the birth rate and the death rate.

Many LDCs are experiencing an increase in life expectancy. This is good news for individuals and families. However, while life expectancy has increased, birth rates have not decreased, at least not significantly. What this means is that births are far outpacing deaths, leading to rapid population growth.

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