Chapter 35: Differences in Economic Development
Between Countries (Detailed Notes)
1. What is Economic Development?
Definition
Economic development is the improvement in living standards and quality of life, including income,
education, healthcare, and freedom of choice.
It goes beyond just increasing GDP — it focuses on well-being and opportunity.
2. Indicators of Economic Development
1. GDP per capita (income)
Measures average income per person
Limitation: Doesn’t show income distribution
2. Life Expectancy
Reflects healthcare, nutrition, and sanitation
Higher = better development
3. Infant Mortality Rate
Number of infant deaths per 1,000 births
Lower = better healthcare
4. Literacy Rate
% of people who can read and write
Indicates quality of education system
5. Human Development Index (HDI)
Combines:
o Income (GNI per capita)
o Education (years of schooling)
o Life expectancy
Value between 0 (lowest) and 1 (highest)
3. Causes of Differences in Development Between Countries
A. Natural Resources
Countries rich in oil, minerals, or fertile land often develop faster
BUT: Overdependence on resources → resource curse
B. Education and Skills (Human Capital)
Educated population → higher productivity
Poor countries may lack schools, teachers, or training systems
C. Healthcare
Healthy workers = productive workers
High disease burden (e.g. malaria, HIV) lowers development
D. Infrastructure
Roads, power, internet, ports
Poor infrastructure = lower business efficiency
E. Political Stability and Institutions
Stable governments = better policy and investment climate
Corruption or conflict reduces development
F. Level of Investment
More investment = better capital (factories, machines)
Poor countries struggle to attract foreign direct investment (FDI)
G. Access to Technology
Improves productivity and efficiency
Many developing countries have outdated technology
H. Geography and Climate
Landlocked countries may face high transport costs
Tropical climates may suffer from disease or natural disasters
I. Population Growth
High growth = pressure on jobs, food, services
Can result in youth unemployment and poverty
4. Consequences of Underdevelopment
Poverty
Poor healthcare and education
Unemployment
Low productivity
Dependence on aid
Brain drain (emigration of skilled workers)
Debt from foreign borrowing
5. Strategies to Reduce Development Gaps
A. Aid
Bilateral (government to government) or multilateral (via organisations like World Bank)
Can fund schools, hospitals, infrastructure
Risk: dependency or corruption
B. Trade and Globalisation
Export-led growth helps countries like China, Vietnam
Requires competitiveness and market access
C. Encouraging FDI
Brings capital, technology, and jobs
Requires stable policies and investor protection
D. Education
Improves workforce productivity
Long-term investment with high returns
E. Healthcare
Reduces disease burden
Improves labour force strength
F. Microfinance and Local Entrepreneurship
Small loans to start local businesses
Encourages grassroots economic activity
G. Debt Relief
Reduces pressure on government budgets
Can redirect money to social development
6. Evaluation and Conclusion (8-Mark Essay Points)
Benefits of Development Strategies
Aid can support infrastructure
Trade opens opportunities for growth
FDI creates jobs and skills
Limitations
Aid may be misused
Trade may favour richer countries
FDI may exploit cheap labour
Conclusion: A mix of policies is needed. Long-term development requires investment in people
(education, healthcare) and institutions, not just money or trade deals.
⭐ Exam Tips
Always define “economic development” and use examples
For 6/8 mark answers:
o Use 2–3 well-explained causes
o Include real-world examples
o Give a balanced evaluation
Use terms like:
o HDI, infrastructure, brain drain, FDI, trade barriers