Economics: Today and Tomorrow © 2008

Chapter 19: Economic Growth in Developing Nations

Chapter Overviews

Section 1: Characteristics of Developing Nations
Foreign investment and aid help nations to develop economically. Many nations have less industrial development and a lower standard of living than the United States. Developing nations are usually characterized by low GDP per capita, emphasis on agriculture, poor health conditions, low literacy rates, and rapid population growth.

Section 2: The Process of Economic Development
Most nations pass through three stages of economic development: the agricultural stage, the manufacturing stage, and many workers shift into the service sector—sales, food service, and technical services. Developing nations are usually characterized by low GDP per capita, emphasis on agriculture, poor health conditions, low literacy rates, and rapid population growth. The major outside sources of capital for developing nations are foreign investment and aid from developed nations. Other topics covered are various ways of financing economic development, a description of the major sources of foreign aid, and an exploration of the reasons for giving foreign aid.

Section 3: Obstacles to Growth in Developing Nations
Local traditions, rapid population growth, misuse of resources, and trade restrictions can all hinder economic development. Furthermore, this chapter explains why Indonesia failed to experience economic growth.

Section 4: Economic Development in China
The Chinese economic system developed after World War II, and they implemented the Chinese five-year plans in the 1950’s. China’s future economy is aimed toward more of a free enterprise system.