Economics: Today and Tomorrow © 2012Chapter 19:
Economic Growth in Developing NationsChapter OverviewsSection 1: Characteristics of Developing Nations
Developed countries have increased their standards of living by moving from agricultural to industrialized economies. Developing countries are usually characterized by low GDP per capita, emphasis on agriculture, poor health conditions, low literacy rates, and rapid population growth. Also, weak property rights frequently undermine economic development. Section 2: The Process of Economic Development
Most nations pass through three stages of economic development: agriculture, manufacturing, and finally a service-based economy. The major outside sources of capital for developing countries are foreign investment and aid from developed countries. The United States devotes a smaller fraction of its GDP to foreign aid than many other developed countries do. Foreign aid is motivated by humanitarian, economic, political, and national security reasons. Section 3: Obstacles to Growth in Developing Nations
Four major obstacles to growth are local traditions, rapid population growth, misuse of resources, and trade restrictions. For example, Indonesia could not turn abundant natural resources and foreign aid into lasting economic growth. Section 4: Economic Development in China
Not all developing countries stay poor forever. China's rapid economic growth is a result of free-market reforms. The legal protection of some private property has encouraged the private investment necessary for China's transition to a mixed economy. China has encouraged foreign investment in its economy to promote growth and access to global markets.  | 
