The Costs and Benefits of Economic Growth in Developing Countries

The aim of this Activity is to encourage some thinking about the costs and benefits of economic growth in developing countries. Many would assume that to improve the situation faced by many people in the developing world, some means of increasing the economic growth of the country is desirable.

Economic growth may have benefits but these must be balanced by a consideration of the costs of economic growth. In particular, we must consider the factors relating specifically to developing countries that could lead economic growth to have a different impact to that which might be expected in the developed world.

Economic growth does not always bring the expected benefits for all. The benefits have to be weighed against the costs, costs that are not always as obvious as increases in pollution and environmental degradation. © Photolibrary Group

Your Task

Prepare a presentation using a suitable medium outlining the costs and benefits of economic growth to a developing country.

In your presentation, you should seek to outline the accepted costs and benefits of growth but must attempt to be able to place those costs and benefits into the context of developing countries to show an understanding of how this might affect the outcome, compared to the impact of economic growth in developed countries.

The following points are designed to help you in your thinking:

Do developing countries have the bureaucratic infrastructure to ensure taxes are collected and used appropriately?
What institutional and cultural changes are necessary to help developing countries take advantage of economic growth?
What are the opportunity costs of economic growth to developing countries?
Are factors such as pollution, environmental degradation and a reduction in biodiversity likely to affect developing countries more than developed countries - if so, why?
Will the costs and benefits of economic growth differ depending on where the developing country is situated, for example, sub-Saharan Africa, Asia, and South America?
Is a lack of regulation and legislation likely to lead to developing countries being exploited by firms from the developed world such that the benefits of any investment are not felt by the population as a whole?
How far will corruption and the nature of the political system determine the benefits and costs of economic growth?
How important is the establishment of property rights a factor in the benefits gained from economic growth?
Are the opportunity costs of economic growth, as we understand it, too high for developing countries?

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The Costs and Benefits of Economic Growth in Developing Countries - Activity

Your Task