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Differences between Developing and Developed Countries

Differences between Developing and Developed Countries

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There is a big difference between Developed Countries and Developing Countries as the developed countries are self-contained flourished while the developing countries are emerging as a developed country. Developing Countries are the one which experience the phase of development for.....

Differences between Developing and Developed Countries

	Developed Countries	Developing countries
GDP Per Capita	Income from production of high value goods + services Highly skilled labour force Capital intensive production methods	Income predominantly from agricultural goods Prices of agricultural goods tend to be low so generates low income Oil v Wheat? Protection policies such as tariffs imposed on agricultural goods by some countries This reduces export revenue for developing countries
GDP Per Capita Impact on Economic Performance	Good level of income allows for development in services and infrastructure and in improving education and productivity	Poorer countries struggle to earn income they need to improve economic development They may be forced to borrow money from abroad to invest in their economies resulting in increased foreign debt (interest payments)
Distribution of Income and Wealth	Efficient progressive tax systems in place Provide welfare benefits to the poor	Have larger informal (Black Market) economies, making tax collection difficult Therefore have less revenue to spend on welfare and public services like education, healthcare so the cycle continues More likely to suffer from corruption
Distribution of Income and Wealth Impact on economic Performance	Absolute poverty largely eradicated from developed countries (but relative poverty still a concern)	More people living in absolute poverty
Productivity	Higher productivity level due to a skilled labour force and investment in modern technology	More unskilled labour due to poor education system and limited training opportunities Do not have the money to invest in capital equipment and machinery will lead to lower productivity
Productivity Impact on economic Performance	Economic growth more likely as productivity and output should improve year on year so revenue should improve too	Relatively unskilled leads to fewer products and services produced and lower income as a result Less revenue available to invest in improving their economies
Population growth	Slow population growth rates due to women choosing careers, marrying later, having fewer children High cost of raising children another factor for lower birth rates	Rapidly growing population due to high birth rates (poorest regions in Africa have 2.7% rith rate compared to 0.4% in EU)
Population growth Impact on Economic Performance	May need to plan for a ageing population e.g. Japan, china	Rapid birth rates put strain on resources Absolute poverty may rise as population grows Tend to have larger dependent populations putting on pressure on the working population e.g. 51% of Niger’s population aged under 14
Size of Primary, secondary, tertiary Sector	Mainly have jobs in the tertiary sector which requires a higher level of education and skill	High proportion of workers in primary sector
Size of Primary, secondary, tertiary Sector – Impact on Economic development	Farming tends to be capital intensive cheaper to produce and output more productive	Farming tends to be labour intensive so workers more unskilled so receive low wages and risk of drought and crop failure
Saving and Investment	Higher income enable them to save and invest more in capital equipment and development of new technology to increase productivity and expand output	Lower revenues results in less opportunity to save and invest so productivity unlikely to improve
Saving and Investment Impact on economic Development	Money makes money	Trapped in poverty cycle Have to borrow to invest leads to high levels of debt Interest rates tend to be high
Education	High quality school education accessible for all, many go on to university results in ever improving skilled workforce	Lack income to invest in education as a result skills level and productivity of the labour force likely to be low Poor education makes it difficult to raise themselves out of poverty
Education Impact on economic Development	Higher economic growth and improving productivity	Without education many trapped in inter generational poverty (People born into poverty likely to be trapped in poverty due to low education) Results in low economic growth and productivity
Healthcare	Higher standard of medical care accessible to all Better access to healthier foods, clean water	May lack access to basic medical care such as vaccinations to prevent disease Safe water and sanitation may not be accessible increase spread of life threatening disease
Healthcare Impact on Economic development	Life expectancy higher many of which have an ageing population, as a result higher taxes may be in place to fund pensions and health services Number of elderly people living in relative poverty may rise	Life expectancy lower and poor health will reduce productive capacity. Swaziland 49 Japan 84
Infrastructure	More money to invest in roads, communications, housing, transport links	Lack funds to invest in infrastructure which results in poor roads and unreliable power supply
Infrastructure Impact on economic development	Attracts investment from Private business and FDI (Foreign Direct Investment)	Poor infrastructure reduces productive capacity and discourages investment

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