THE SPECIAL PROBLEMS OR OBSTACLES TO ECONOMIC
DEVELOPMENT OF DEVELOPING COUNTRIES
The processes of economic development shall not only generate an increased or
enhanced means for production but it shall also make a room for the equitable distribution of
such resources. Thus by the terminology economic development it is meant a process to raise the
per capita output with the scope for an equitable distribution; attainment of the higher level of
productivity in relation to almost all sectors and a far better level of living for general masses.
To achieve the path of economic development in an underdeveloped economy is really full of
hurdles or the impediments. Attaining the higher level of economic development is the function
of level of technology. Economic development is thus process which relates to raising the rate of
capital formation, i.e. both physical capital and the human capital. The problem of economic
development for the developing nations has been the never ending one after the World War II.
The Least Developed Countries are defined by political scholars as “Countries at a relatively low
level of economic growth and development.” Problems of economic development are the
problems of accounting for observed diversity in the levels and the rates of growth of the per
capita income across the countries and across time.
There are numerous of obstacles that the developing countries face in the path of
economic development. One of the major hindrances in economic development which are faced
by developing countries is Vicious Circle of Poverty .It is considered as one of the major
constraints or obstacles to the path of economic development of the underdeveloped countries.
Vicious circle in the underdeveloped countries represented by low productivity is resulted from
capital deficiency, market imperfections, economic backwardness and poor development.
This vicious circle operates not only on demand side but also on supply side.
Low productivity results in low level of income and low rate of savings leading to low rate of
investment, which is again responsible for low rate of productivity. Thus the vicious circle of
poverty is resulted from various vicious circles related to demand side and supply side of capital.
These vicious circles of poverty are mutually aggravating and it is really difficult to break such
Increase in the population is also affecting the economic development of the less developed
countries. The populations of less developed countries are sharply increase. Most of the less
developed countries are facing many problems in the path of their economic development. The
mostly countries in Asia and Africa, the rate of population growth between 2% to 3% which
affects the economic growth and this is the big hurdle for the developing countries.
When population is increase then there is abundance of inefficient human resources in less
developed countries. Ineffective human resources are also a major hurdle in the path of economic
development for developing countries. Though there is an extra labour in the developing
countries but these labours having no knowledge or skills. It is easy to say that due to high
population so that result is poverty and it makes the families to fulfill their basic need that is
food, cloth, and house only. Developing countries are deteriorating due to untrained and
unskilled labors are there So production system of developing countries are also going backward.
An external debt is also major problem for developing countries in economic development.
When government takes actions for some major projects then he has to take loans from
international nations. So these services and debts are chargeable and increase day by day. When
we are taking loans from external resources then we have to follow the conditions of donors and
this is the obstacle in the economic growth of developing countries.
Backward Technology is also one of the main reason due to which developing and
underdeveloped countries could not achieve the goal of economic development. The less
development countries are neither able to purchase new and modern technologies nor able to
adopt latest technology. The developing countries are having large number of labors but there is
lacking of capital resources. So developing countries technology is backward and due to the
backwardness of technology the developing countries production system also fails.
Political inconstancy is also big hurdle for the developing countries of their economic
development. Most of the developed countries and less developed countries are confront this
problem of the political inconstancy which results from the regular change in the government,
corruption and also disturbed the internal law and rules. Such type of political inconstancy
causes uncertainty about the future steps and it affects the economic growth or development of
the less developed countries.
Moreover, the corrupt administration in these developing countries outcome the huge leakage of
public fund which is given to them for developmental activities.
It has been rightly observed that economic development “is not just a matter of having plenty of
money nor is it purely an economic phenomenon. 1It embraces all aspects of social behavior, the
establishment of law and order, scrupulousness in business dealing, including dealings with the
revenue authorities, relationship between the family literacy, and familiarity with mechanical
gadgets and so on.2”
The economic development of country is not easy and doesn’t simply requires the removal of
these basic hurdles/barriers like market imperfection, An external debts, Increase in the
population and vicious cycle of poverty but with this removal it also requires some special
actions which are related to economic development like participation of the people, economic
organization and equality income and so on.
1 Prof. A.K. Cairncross 2 Prof. A.K. Cairncross
The People’s participation is very necessary in developmental activities or projects and also legal
and principle force behind all the developmental activities and projects by the under developed
countries. If people participation is not in their schemes or projects then this economy strategy
can’t be effective.
It was observed, “Popular enthusiasm is both the lubricating oil of planning and the petrol of
economic development—a dynamic force that makes all things possible.”3
The role of Economic organization in economic development of less developed countries is also
very important. For making the development planning and strategies of a nation’s effective it has
to be undercover by the proper economic organizations for the encouragement of such economic
development and not restraining it in any way. The economic organizations of the country should
be active and always present to respond for the various requirements of the planning for
A proper balance between private and public sectors initiatives is also very necessary to
involvement of such an effective economic organization. If the countries want to achieve rapid
economic growth then the underdeveloped countries should introduce rational reorganization of
The developing countries are highly attaining the Administrative Efficiency in their countries.
The existence of the stable strong, efficient and the honest government machinery appears to be
considered an important condition for the economic development.
The developing country shall also build up domestic base for the purpose to achieve economic
development. It means whatever the initiatives has taken for the purpose to achieve economic
development that shall come from within their economy of such underdeveloped country not
3 Prof. W.A. Lewis