Features of a developing economy - Introduction, Indian Economy Video Lecture | Indian Economy - B Com

hey everybody I hope you're doing well
today well let's take a look at the
common characteristics of developing
countries and trying to work at
understanding what they are and these
are fundamentally flawed right because
there isn't like a series and there's
going to be seven here of like
characteristics that all developing
nations have but Michael Todaro who put
together he's in a development economist
put together this list and Jocelyn Blink
included it of course companion and I
think it's useful to have in your mind
to understand like what is common about
a developing country because then you're
going to try to figure out like how
could developed nations sort of help
this category of developing countries
okay so let's take a look at what they
are so this is this video is going to be
insufficient for you in terms of totally
understanding all of the complexities of
each of these seven categories but let's
just take a look at the first one low
standard of living so B so what are they
one two three four five six seven the
characteristics of common characters of
doubling nations is that there's a low
standard of living there are low incomes
there's a lot of inequality poor health
and inadequate education okay so what
that is a function of more than anything
else is really the under development or
I like to think of it as the maybe the
ineptitude or the of the government or
then that just the basic like like age
of the nation right it's a really
helpful thing in development economics
to make a relationship between how old
the country is and what the expectations
are of what that country could achieve
just like a child like if you have a
first grader what you expect that child
to to achieve is much less than a 40
year old adult but if you take the 40
year old adult perspective and then
apply it to the first grader it's a
really big disservice because that first
grader is never going to be able to do
that and all countries like all 40 year
olds were once first graders and so you
got to really check any sort of
assumptions you might have in your mind
about why certain countries don't
function well or don't function as well
but low living standards poor housing
low standards of health high inferred in
from
high infant mortality rates these tend
to be characteristics of developing
nations okay
next this one you got to be really date
you got to be really careful with low
levels of productivity which is
described as like low output or output
per person this has nothing to do with
intelligence this has nothing to do with
abilities this has to do with the fact
that there are developing nations tend
to have low education standards they
tend to have low levels of health
standards amongst its workers there's a
lack of investment in physical capital
and therefore lack of access to
technology I grew up in the United
States and I benefited from that luck if
you put me in the hills of the Dominican
Republic guess what I my life would be
similar to people in the hills of the
Dominican Republic because that's where
I grew up and so if the Dominican
Republic is the third poorest country in
this hemisphere and as a result of that
they have low levels of education low
levels of health lack of investment
physical capital lack of access to
technology that would have been me that
hasn't tells nothing about my
intelligence says nothing about my
abilities it has to do with where I grew
up so this low levels of productivity is
not be careful and you got to check any
sort of bias that you might have in your
mind if you didn't grow up in one of
those particular countries it's really
important okay the third thing high
rates of population growth and
dependency burdens you really need to
check your your textbook out for this
this can this can go on for a long time
this discussion but developing nations
tend to have crude birth rates that are
more than double on average the rates of
developed nations right so joseline
blanks provide us with this statistic
the crude birth rate is the annual
number of birth rates per 1000 people in
the population the world average in 2005
was twenty point one five but in some
developing countries it can be as high
as 50 right so higher buthe birth rates
create dependency burdens and what that
means is that if you have high birth
rates then you're going to have more
children dependent on adults in a less
developed nation then you would have in
a more developed nation if less
developed nations have higher birth
rates then you're going to have more
young children per adult than in a
developed country and as a result since
those people aren't productive Reich and
they're chill
for society economically there's a
higher what they call child dependency
ratio the other dependency ratio is
actually for older people which is the
percentage of those non-productive
or retired people over the age of 65 as
expressed as a percentage of the working
age and you know take a look into this
more more more closely but the
differences between these two things
tends to create there the higher the
ratio of either the child dependency
ratio or the old age dependency ratio
obviously what you have is you have more
people who are non-productive parts of
society who are depending on those who
are working the other thing common
characteristic of developing Ignatians
is high and rising levels of
unemployment and underemployment and
this is really important to try to get
your mind around developing countries
tend to have relatively high rates of
unemployment and it's listed at between
10 and 20 percent but really if you were
to have the the luxury of being able to
travel to some more less developed
nations you would realize that there are
a lot of people who wouldn't be
calculated into the unemployment rate
right first of all those who have been
unemployed for a long period of time may
not be searching for a job so they're
not considered to be part of the
unemployment rate secondly there is
hidden unemployment right those who work
a few hours in the day on a family farm
or in a family business or in a trade of
some sort or not they don't show up in
the unemployment rate or as unemployed
and the other thing is people who are
underemployed right the third thing is
those underemployed which would be those
who would like full-time work but they
only get part-time work right and it's
said that in some developing nations
actual employment rates might be around
50% okay so the other thing is in
agrarian society you don't go get a job
right if you provide primary an agrarian
society it's there people are working on
their own farms you know or earning
growing their own food to survive are
they unemployed well no because there's
no job that they're trying to get yet
they're because they're working for
themselves okay
the fifth thing is substantial
dependence on agricultural production in
the primary market exports
developing nations tend to function in
this like primary market which is which
it has to do with agricultural or the
extraction of raw materials from from
their countryside right and what that
means is they're not producing their own
things right they're not manufacturing
which is a secondary level of economic
development a tertiary is when you get
into of course like consulting or
something where you're giving expertise
so substantial there's a substantial
dependence on for developing countries
on agricultural production the sixth
thing is is prevalence of imperfect
markets and limited information this is
kind of a more sophisticated development
or economic idea but the idea here is
that developing countries may lack the
necessary factors and enable markets to
work efficiently this could be a
developed legal system this could be a
lack of infrastructure right this could
be lack of accurate information I know
from my years as a Peace Corps volunteer
in the Dominican Republic all the
methods for there are three seasons of
beans you can grow beans three times a
year and all of the the the men in my
little community of 30 homes where I
lived would all of a sudden get really
excited because they're going to plant
their beans because the price of beans
right before the bean season was really
high and therefore they anticipated that
when they sold when they had the harvest
and 45 days of beans that they would get
a really high price except what the lack
of information they had due to education
and and and just lack of information in
general is that beyond their scope of
like 30 men who are growing beans
there's thousands other compa ceno's
country-folk growing beans as well so
the time they all got their harvest well
what happened to the price of beans of
course it collapsed okay so lack of that
kind of information or lack of a
developed legal system where you can
that the contracts don't matter will
have it is a common development a common
characteristic of developing nations and
then the last one is dominance
dependence and vulnerability in
international relations and in almost
all cases development developed
developing countries are dominated by
developed countries because of the
economic and political power of the
developed countries this could be as a
result of tradition whether it's a
colonial power
you know that had power over developing
nation at one time but it's it's
oftentimes it's not really possible for
economically small developing countries
to isolate themselves from world markets
and for these reasons developing
countries are vulnerable on the
international stage what can they do
they're like little guys out there right
it's like a first grader trying to
compete with a 40 year old and some sort
of economic trade they're not really
going to be able to do it so all of
these factors are characteristic of
developing economies and can also
represent hindrances to economic growth
and therefore possibly hindrances to
economic development okay so take a look
at the bottom of the screen down down
below here in the discussion you'll see
a list of things use those as a way in
which you can sort of categorize the
information in your mind for development
economics all right I hope you thought
this video was helpful we'll talk to you
a bit