Brad Cartwright

Let's take a look at the common characteristics of developing nations. For those of you who have purchased The Global Economy course, this may be familiar to you.”

When we talk about the common characteristics of developing nations, it’s important to tread carefully.

These are broad generalizations meant to help us understand commonalities across many countries, but they don’t capture the diversity within and between nations.

In fact, our next step in this study will be looking at the diversity of developing nations, which highlights how no single description fits all.

 Still, understanding these shared traits is a helpful starting point in our exploration of development economics.

1. Low Standard of Living

One of the most notable characteristics of developing nations is a low standard of living. This often means:

• Low incomes, which limit people’s ability to meet their basic needs.
• Significant inequality in income distribution.
• Poor health outcomes, often due to inadequate healthcare systems and access.
• Inadequate education, which perpetuates cycles of poverty.

These challenges aren’t due to a lack of effort or ability. They are deeply tied to systemic issues like generational cycles of poverty, access to education, and healthcare.

A higher standard of living often depends on sustained economic growth over time, something many developing nations are still striving for.

2. Low Levels of Productivity

Productivity in developing nations is frequently lower, not because of the people’s potential, but because of systemic barriers.

Education plays a huge role here. For example, someone born into a family with limited access to schooling may lack the opportunities needed to develop skills and knowledge, which in turn affects their productivity.

Health is another factor. Without adequate healthcare, people may be unable to work at their full potential.

This isn’t about individuals working less hard—it’s about the environments and opportunities they’ve been given.

3. High Population Growth and Dependency Burdens

Developing nations often experience high birth rates, leading to two challenges:

• Child Dependency Burdens: A large proportion of the population is made up of children, meaning fewer working adults must support more dependents.
• Old Age Dependency: In some cases, there aren’t enough working-age adults to support an aging population.

Both create economic strain, making it harder to allocate resources effectively across the population.

4. High Unemployment and Underemployment

Unemployment rates are generally higher in developing nations, but they can be tricky to measure accurately.

For example, a subsistence farmer working to grow food for their family isn’t technically unemployed but might not be contributing to the formal economy.

Underemployment is also common, where people may have jobs but are working fewer hours than they’d like or are overqualified for their roles.

5. Dependence on Agriculture and Primary Exports

Developing nations often rely heavily on agriculture or the export of primary goods like minerals, crops, or raw materials.

This dependence can make economies vulnerable to fluctuations in global markets.

For example, if the price of a major export drops, it can have devastating effects on the national economy.

This reliance often stems from colonial histories, where European powers extracted resources and built economies around them.

6. Imperfect Markets and Limited Information

Markets in developing nations can be less efficient due to limited access to information.

Imagine a farmer planting lettuce every year without realizing that everyone else is doing the same. When harvest time comes, the market is flooded with lettuce, driving prices down.

This lack of market knowledge and access to education keeps individuals and economies from reaching their potential.

7. Dominance and Dependence in International Relations

Developing nations are often former colonies, and their histories continue to influence their relationships with more developed countries.

These nations may depend on wealthier countries for aid, trade, or investment, which can limit their autonomy.

Additionally, external political interventions can shape their development trajectories, often creating complex challenges.

Final Thoughts

As we explore these characteristics, it’s essential to approach them with sensitivity and understanding.

These generalizations serve as a framework but don’t capture the unique stories and contexts of individual nations.

Developing nations face challenges rooted in history, geography, and global systems, but they also possess immense diversity and potential.

Be good out there.