4.3 The Role of Domestic Factors

Measuring Development Education Health Infrastructure Appropriate technology Access to credit Empowerment of women Income Distribution

Education What role does education play in development? Education leads to: More productivity - international competitiveness - import substitution - tax revenues  reinvestment in education - technology Jobs - Income - Further investment in human capital Gender equality - Assuming girls are educated

Education Education leads to: FDI - tax revenue - technology transfer - expertise transfer Health outcomes - spread of disease, contraception - medical professionals BUT Money? Overcoming cultural boundaries

Health What role does health play in development? Improved health outcomes lead to: More productivity - skills are retained - absenteeism Happiness - confidence Lower birth rates - more disposable income - more investment in human capital

Health BUT Money? Private sector reliance?

Infrastructure What role does infrastructure play in development? Investment in infrastructure leads to: Trade - ports, rail, road - lower production costs FDI - as above Health and education - schools and hospitals exist BUT Money?

Appropriate technology In what ways is technology ‘inappropriate’ for LDCs? is harmful to the environment - water depletion - forest depletion needs high human capital - not available in LDCs - foreign workers needed needs highly-developed infrastructure - power/water sources

Appropriate technology Solar-powered laptops Solar-powered cookers Lighting

Credit and micro credit Lack of capital a huge barrier Western businesses reliant on start-up capital Entrepreneurs can flourish Saving incentive Development banks – long-term loans Banks not always bothered with low-value loans

Credit and micro credit e.g. Buying a tractor

Credit and micro credit Pitfalls High interest rates Risk assessment Limited reach

Empowerment of women Why is this important? Education and power leads to: Improved health Improved education for families Lower birth rate Higher disposable incomes

Income distribution Why should income be distributed more equally? Undue political influence - health and education outcomes Low savings potential of the poor - low investment Increased local consumption - greater disposable income