Political and Social Barriers

There are also various political and social barriers to economic growth/development. These include:

• Weak institutional frameworks

  • • Weak legal system: Strict/authoritative laws or an unpredictable court will prevent proper investment, hindering growth/development.

    • Ineffective taxation structures: Too high taxes discourage hard work, too low taxes prevent a proper redistribution of income.

    • Weak banking system: Less developed banks mean less borrowing and hence investment.

    • Weak property rights (both physical items like land as well as copyrights/patents): A lack of enforcement of such rights will discourage investment (as it becomes risky) and innovation (as others can just copy).

• Gender inequality: Gender inequalities decrease general well-being, and reduces productivity. This hinders growth/development. 

• Lack of good governance/corruption: Bribery makes economies seem less trustworthy, decreasing investment and confidence, and is detrimental to economic development in the long run.

• Unequal political power and status: Those with high power/status will likely prioritize themselves, leaving those with less money and power behind. This will increase inequalities, hampering economic development.