Background§
“Less Developed Countries” (LDCs) refers to nations characterized by low income, literacy, and life expectancy levels. These countries are primarily found in Africa, Asia, Latin America, and various small island states.
Historical Context§
The term “Less Developed Countries” gained prevalence post-World War II as the world began to recognize distinct economic performance segments between developed and developing nations. The United Nations has since classified LDCs based on criteria that include gross national income (GNI) per capita, human asset index (HAI), and economic vulnerability index (EVI).
Definitions and Concepts§
Less Developed Countries are often also called developing countries, not fully embracing the economic structures, democratic institutions, and wealth levels that characterize developed nations. Defined by various development indicators such as income levels, literacy rates, and life expectancy, these classifications serve to direct international aid, trade benefits, and developmental support.
Major Analytical Frameworks§
Classical Economics§
Classical economists did not fully address the complexities faced by LDCs but contributed to initial understandings of market mechanisms that influence development.
Neoclassical Economics§
Neoclassical frameworks often emphasized the role of market efficiency and capital accumulation in the growth of LDCs but faced criticism for oversimplification.
Keynesian Economics§
Keynesian thought significantly impacted development economics by emphasizing the role of effective demand, government intervention, and investment in infrastructure within LDCs.
Marxian Economics§
Focused on issues of class struggle, imperialism, and the extraction of surplus value, Marxian economics critiques the impacts of capitalistic exploitation on LDCs.
Institutional Economics§
Institutional economics underscores the importance of sound institutions in fostering development in LDCs, examining governance systems, regulatory frameworks, and social norms.
Behavioral Economics§
Behavioral approaches investigate how LDCs’ development may be influenced by cognitive biases, societal behavior, and policies tailoring to human psychological characteristics.
Post-Keynesian Economics§
Post-Keynesian perspectives address LDCs by critiquing mainstream economic thought, advocating for demand-led growth strategies, and exploring the historical, social context of economies.
Austrian Economics§
Austrian economists often stress the significance of entrepreneurial activity, private property rights, and free-market principles in the growth of LDCs.
Development Economics§
This subfield specifically studies economic development within LDCs, addressing facets like poverty reduction, income distribution, healthcare, education, and sustainable growth.
Monetarism§
Monetarist strategies focus on controlling inflation and monetary policy stability as essential for economic growth in LDCs, albeit sometimes with contentious outcomes.
Comparative Analysis§
LDCs differ widely in their development trajectories based on historical, cultural, political factors, and resource availability. Comparative studies often investigate why certain regions achieve faster growth rates, economic stabilization, and societal improvements than others.
Case Studies§
Case studies highlighting countries like Bangladesh, Ethiopia, and Haiti provide detailed accounts of development challenges, policy interventions, and milestones achieved.
Suggested Books for Further Studies§
- “Development as Freedom” by Amartya Sen
- “The Bottom Billion” by Paul Collier
- “Poor Economics” by Abhijit V. Banerjee and Esther Duflo
Related Terms with Definitions§
- Emerging Markets: Economies transitioning from developing to developed status, experiencing rapid growth and industrialization.
- Newly Industrialized Countries (NICs): Developing countries that have achieved noticeable industrial growth and reduced relative poverty over a short period.
- Global South: A term often synonymous with developing countries but emphasizes geopolitical and socio-economic elements in a global context.
