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Barriers to Growth

Barriers to growth are factors, situations, systems, or cycles that create difficulties for an economy to grow. These obstacles can stop a developing country from improving their economic situation. These barriers can be separated into categories, yet it is important to keep in mind that these barriers are interrelated. Barriers can slow down or restrict economic growth, economic development, or both. Institutional and political barriers play an enormous role in the development of a country’s economic situation.

Within this broad category, the insufficient provision of education in developing countries can act as an obstacle for economic growth. Developing countries may not have to means to fund education, and generally urban areas will be funded more than rural areas. The lack of education means that children will grow up without the learned skills that are required for basic entry-level jobs. Without the skills that are acquired through education, it is difficult to earn a sufficient income. Lack of infrastructure is another issue that falls under institutional and political barriers. Infrastructure includes vital services and facilities such as sewage treatment, water systems, roads, telecommunications and other such utilities that are crucial for economic activity. The lack of basic needs, such as education and water systems, act as barriers to growth.

Poverty cycles play a significant role in the growth, or lack of, within an economy. The poverty cycle is when individuals or community members are trapped in a state of low education levels and low employment opportunities, unless external sources intervene. Poverty is usually measured by relative poverty, which is comparative, and absolute poverty, which is when the basic needs for survival are measured. The poverty cycle remains a prominent obstacle for developing countries, and unless poverty is improved for a country, their economy will not grow.

Barriers to economic growth are demonstrated by an individual’s inability to claim property rights. This makes it more difficult for business to start up and for individuals to gain financial stability. There are many economic issues that exist in developing countries that act as barriers to the country’s growth, but there are also many solutions to these problems. Over the years there has been some improvement, but until these barriers have been properly addressed, they will continue to obstruct a country’s economic growth.

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