Critically discuss the factors that determine and influence the economic development of a country.
Development of an economy is influenced by both economic and non-economic factors:
Economic Factors as determinants of Development
Economic factors as determinants of development include natural and human resources.
Natural resources (those which are available as a free gift of nature) include land, water, minerals, fossil-fuel, forest products, wind and solar energy, etc. Natural resources can be broadly divided into three categories viz. Bioclimatic resources (land, water, forests and climatic environment), Fossil Fuel and non-fuel mineral resources. The countries, which are rich in natural resources have more scope for development.
Human resource can be divided into two categories viz. Physical labour and Human skill. Physical labour is the labour supply and skill is the knowledge embodied in humans. Human skill is formed when investment is made into education, health, training etc. Human resources are also equally important. Few countries such as Japan are poor in natural resources but their human resources have turned those countries into epitome of success.
Non-economic factors refer to socio-political factors or even religious factors. Political environment directly influences the economic development. Stable political administration generates faith of the people in the programmes and policies of the government. Accordingly, people venture to make investment in diverse areas of economic activity. Social institutions like caste system, joint family system and laws of inheritance play an important role in economic development. A corruption-free system is certainly more conducive to the process of growth and development, than the one where corruption is present.
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