Role of domestic factors

The role of domestic factors

Education & Health - The development of human capital

Human capital plays a really important role in economic growth, and education and health are especially important for economic development

Here are the possible positive externalities that health and education can bring to the society

The role of appropriate technology

Appropriate technology is a technology that is well-suited to particular economics, geographical, ecological, and climate conditions.

Mainly we can distinguish technologies in two different kinds: labour-using & capital using

Labour-using / Labour-intensive technologies - technologies use more labour in relation to capital

Capital-using / Capital-intensive technologies - technologies use more capital in relation to labour

Most developing countries are unable to develop (lack of resources) the technologies that suited their needs. Inappropriate use and development of technologies will result in increase in unemployment and limit the growth of urban sectors / increase in the growth of urban 'informal' sector.

Banking, credit, and micro-credit

Banking services and access to credit are very important to economic growth and development, they can contribute to the growth and development in the following ways:

Provide an incentive (interest return) for people to save

Provide business and farmers with credit to run, operate, or even expand a business

Provide consumers with credit that can be used for investments in human capital

Allow low-income earners to have a chance to invest in necessary capitals

These can all help to increase productivity and development in both short and long term

Micro-credits - credit (loans) in small amounts to people who do not ordinarily have access to credit (very small amount of loans). This is delivered to poor people though MFIs (micro-finance institutions).

However, there are also some issues of the micro-credit：

Micro-credit schemes may become a substitute for urgently needed government anti-poverty policies

Micro-credit schemes contribute to the growth of informal sector

Extremely poor, unskilled, illiterate people/family can eventually be harmed by micro-credit.

High interest rate

The empowerment of women

I think I don't even need to say more about this, this is really important! Ideas such as men is always smarter and superior to women are just pure shit.

Women in 21st century are still experiencing inequalities in different sectors of life, such as health, education, labour market, wealth, access to credit. However, this shouldn't happen, and this will lower down the level of economic development.

The benefits of empowering women is just various and insane. I think everyone should really think about this problem, so for here I will not list out the benefits, fill the benefits yourself!

Income Distribution & Infrastructure.

Greater equality income distribution basically helps the poor people to have more chance to access to human capital, and will be helpful to economic development in the long term. Developments and improvement in infrastructure basically makes human capital more accessible, and will also be helpful for economic development in both short and long term.