Political Barriers (Not Finished) Flashcards
Political barriers to economic growth and development
Weak institutional framework
- Legal system
- Ineffective tax structures
- Banking system
- Property rights
Gender inequality
Lack of good governance/corruption
Unequal political power and status
Weak institutional framework
What are institutions?
- Organizations founded for specific purpose.
- Some are government-run –> central bank, tax department, and justice system,
- Others, like banks, are regulated by law.
Weak institutional framework - Legal system
Weak institutional framework - Property rights
Weak institutional framework - tax structures
- Heavy reliance on indirect taxes
- Inefficient, bureaucratic tax systems
- Weak, corruption-prone tax collection
- Wealthy groups influencing tax policy to reduce their burden
Weak institutional framework - banking
Non-convertible currencies
A “blocked currency” is restricted from international trade and used only domestically
Gender inequality
Empowering women strengthens their economic, social, and political roles, driving development.
This is achieved by:
- Reducing gender disparities in education
- Addressing economic, political, and social inequalities
- Educating girls and women
- Women reinvest more in families and communities –> spreading wealth beyond themselves.
- Mothers prioritize spending on health and nutrition.
- Women handle unpaid work for household essentials.
- Dual-income families are more resilient to challenges.
- Educated women have more control over reproduction.
Lack of good governance/corruption
Stable governments attract:
- Both foreign and domestic investment
- Retain savings, and enable efficient long-term planning and citizen participation
- Boost business confidence and prevent capital flight.
Political instability leads to:
- Loss of life, displacement, economic decline, and infrastructure damage, stifling development.
Corruption
Dishonest exploitation of power for personal gain
Occurs when:
- Government is not accountable.
- Government spends on large projects.
- Poor accounting occurs.
- Government officials are not well paid.
- Political elections are not controlled/monitored.
- Weak legal structure.
- No freedom of speech.
Effects of corruption
- Elections are not the people’s wishes
- Reduced trust
- Capital flight
- Reduced well-being of citizens
- Public works money is directed to bribes
- Increased costs/prices
Forms of corruption
Bribery, Extortion, Blackmail, Fraud, Patronage, Nepotism, Embezzlement, Cronyism, Graft, Money laundering
Unequal political power and status
- Wealthier people may more say in the development of government policies
- Politicians develop policies that are in their own interests
- Low income people are less likely to become involved in the political process
Migration
The shift of landless farm labourers to the city, in the search for employment and higher wages
Large scale unemployment in developing countries arises because…
- Increase in the supply of labour
- Decrease in the need for agricultural workers
- Decrease in the need for factory workers
