Structural Constraints Facing Developing Countries

Introduction

Developing countries are also called as less developed countries, these are counties with undeveloped industrial base, low living standard, and low human index as compared to developed countries of the world. For example India is a developing county because of its low living standard while United States of America is a developed country as it has developed industrial base. There are differing views on the criteria by which countries are considered to be developing countries. Those countries that have more advanced economies than other developing countries fall under the category of industrialized countries. It is generally assumed that developing countries lack infrastructure and knowledge that is considered essential to meet the demands and respond flexibly to demand and changes of the world as done by developed counties (Lewis, 1955). Today, Social constraints are faced by developing countries which further affect the development of a country and ultimately that country remains a developing country even after so many efforts. Today, Structural constrains have become an interesting subject for researchers since it adversely affects economy and other components of a country. Thus this paper deals with the problem “Structural Constraints faced by developing countries”. In this research I shall initially be discussing briefly about Structural Constraints and then mainly be focusing on microeconomic aspects of developing countries. I shall be focusing on social constraints faced by India, South Africa, and Nigeria and its impact on its economy.

Aim/Purpose

The purpose of this research is to let the readers know about the impact of Structural constraints faced by developing countries. The issue of (under) development is one of the broader issues and controversy consignments of concern to economic analysis. This work tries to absolute treat the issue in its breadth. It merely makes a relationship between structural constraints and economic growth. This research will let authorities know about the adverse effects of structural constraints on the economy of developing countries as it hinders in the development of that country.

Thesis Statement

Structural Constraints are causing serious problems to economy of developing countries; they can be minimized through effective implementation of policies.

Structural Constraints

Structural constraints include barriers that arise as result of external conditions like lack of opportunities and accessibility issues (Mauro, 2003). Structural constraints are the levels of restrictions. For example: Obama has just broken the, up 'til now, structural constraint that only white men can achieve the position of USA president. The first structural constraint among many is geography. Research states that a contemporary economy cannot effectively function without the diversification and division of labor and this are not only described in historical sense but it is true in modern sense. Hence, developing countries with small number of people living in have face trouble in developing and attaining access to the markets (Mankiw, 2007). On the other hand landlocked countries face difficulty in developing their economy and integrating with global markets. Potential of inter trade can be limited by the constraints in supply side. In addition, there are various other common ...