Top 6 Limitations of Economic Growth
Top 6 Limitations of Economic Growth
Six Factors that Limit Economic Growth are as follows-
1. Poor health and low levels of education
People who don’t have access to healthcare or education have lower levels of productivity. This lack of access means the labor force is not as productive as it could be. Therefore, the economy does not reach the productivity it could otherwise.
2. Lack of necessary infrastructure
Developing nations often suffer from inadequate infrastructures such as roads, schools, and hospitals. This lack of infrastructure makes transportation more expensive and slows the overall efficiency of the country.
3. Flight of Capital
If the country is not delivering the returns expected from investors, then investors will pull out their money. Money often flows out of the country to seek higher rates of returns.
4. Political Instability
Similarly, political instability in the government scares investors and hinders investment. For example, historically, Zimbabwe had been plagued with political uncertainty and laws favoring indigenous ownership. This instability has scared off many investors who prefer smaller but surer returns elsewhere.
5. Institutional Framework
Often local laws don’t adequately protect rights. Lack of an institutional framework can severely impact progress and investment
6. The World Trade Organization
Many economists claim that the World Trade Organization (WTO) and other trading systems are biased against developing nations. Many developed nations adopt protectionist strategies which don’t help liberalize trade.
IMPORTANT LINK
- What is Meaning of Analysis of Financial Statement? Its objectives and importance
- IMPORTANCE AND LIMITATIONS OF FINANCIAL STATEMENTS
- Meaning and Definitions of Financial Statement | Nature of Financial Statements | Characteristics of an Ideal Financial Statement
- What is the scope of management accounting?
- Procedure of Financial Statements Analysis
- Comparative Financial statement Analysis | Advantages of Comparative Financial Statements | Limitations of Comparative Financial Statements
- IMPORTANCE AND LIMITATIONS OF TREND ANALYSIS IN HINDI
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