Major 5 Causes of Poverty in Developing Countries and Economic Growth


Major 5 Causes of Poverty in Developing Countries and Economic Growth. Poverty is one of the most pressing global issues. It’s estimated that there are over 1.3 billion people living in poverty, and the number is growing by the day. In addition, inequality is on the rise, and this has a direct impact on poverty rates. In this blog post, we will explore five major causes of poverty in developing countries and how economic growth can help to solve them. From lack of education to unequal distribution of wealth, read on to learn more about what you can do to fight poverty and promote economic growth in your area.

Lack of Infrastructure

1. Lack of infrastructure
2. Corruption
3. Inefficient and ineffective government policies
4. Lack of education and training
5. Poor economic management

Poor Economic Policies

Poor economic policies are one of the major causes of poverty in developing countries and economic growth. These policies can damage the economy, create unemployment, and reduce the standard of living for many people.

Poor economic policies can include high levels of inflation, an overvalued currency, restrictive trade policies, and taxes that are too high or too complex. These policies can discourage investment in the economy and reduce the amount of money that is available to spend or invest.

Unemployment also results from poor economic policies. When businesses are unable to find enough workers to fill jobs, wages will be lowered and jobs will be lost. This can lead to a decrease in the standard of living for many people who have lost their jobs.

Reduced government spending also contributes to poverty because it reduces the amount of money that is available to provide services such as education and health care. This can lead to increased rates of unemployment and poverty among people who need these services most.

Poverty in America
Poverty in America


Corruption is one of the major causes of poverty in developing countries and economic growth. It hampers the flow of goods, services and money, which limits the ability of businesses to thrive and creates instability. Corruption also leads to political instability, as it undermines the trust that citizens need to invest in their countries’ future.

The World Bank has reported that corruption costs developing countries $150 billion a year in lost GDP. This includes not just business investment but also government spending on education, health care and other public goods. In fact, one study found that every dollar spent on fighting corruption results in $4 worth of additional economic activity.

There are many factors that contribute to corruption, but some common causes are weak civil institutions and a lack of transparency and accountability. These conditions allow bribery and other forms of corruption to thrive because they are difficult to detect and prosecute.

To combat this problem, governments need to strengthen their enforcement capacities, improve transparency laws and establish anticorruption mechanisms at all levels of society. They should also encourage private sector involvement in combating corruption by providing incentives for companies that meet anti-corruption standards.

Inadequate Social Safety Nets

1. Inadequate Social Safety Nets

A lack of social safety nets is one of the major causes of poverty in developing countries and economic growth.

Social safety nets are programs that provide financial assistance to impoverished individuals or families. These programs can include unemployment benefits, welfare payments, and food rations.

The main purpose of social safety nets is to help reduce poverty and improve the quality of life for low-income individuals and families. They also have a deterrent effect on people from seeking employment in undesirable jobs in order to receive government benefits.

In 1971, the World Development Report argued that social safety nets were an important tool for reducing poverty and promoting economic growth. The report found that when social safety nets are available, people are less likely to be forced into low-paying jobs or to live in poverty. Additionally, they are more likely to invest their time and energy in their own businesses, which can create more jobs.

Despite these benefits, many countries do not have adequate social safety nets. This is primarily due to budgetary constraints, political opposition, and lack of awareness about the importance of this type of program. In some cases, governments have tried to cut back on social safety net programs as part of their efforts to reduce government spending. This has led to increased levels of poverty and inequality in these countries.

2. Not Enough Jobs Available for Low-Skilled Workers

Another major cause of poverty is not enough jobs available for low-skilled

Lack of Human Resources

1. Lack of Human Resources
There are many factors that contribute to poverty in developing countries, but lack of human resources is one of the most important. A lack of skilled workers can prevent businesses from expanding and creating jobs, which in turn can lead to poverty. In some cases, a lack of human resources can also be the result of educational inequality. For example, if there are few schools that teach vocational skills, then businesses will have a hard time finding employees who possess those skills. Additionally, a lack of human resources can be caused by poor health and safety conditions. If businesses cannot find employees who are willing to work in hazardous environments, they may have to close their doors.

2. Economic disparity
Economic disparity is another major cause of poverty in developing countries. Economic disparity refers to the difference between the incomes and wealth of different groups of people within a society. Poverty is often perpetuated when there is economic disparity between different sections of society. For example, if one group of people has a lot more money than other groups, they may have more power and be able to keep others impoverished. This type of inequality can occur in many different ways: through discrimination, exploitation, or unequal access to education and jobs.

3. Poor infrastructure
A lack of good infrastructure can also lead to poverty in developing countries. Poor infrastructure means that it is difficult for businesses to expand or maintain their operations due to problems with transportation, energy supplies, or telecommunications networks.. Infrastructure problems also make

Population Growth

There are a number of factors that contribute to poverty in developing countries. Population growth, for example, is one of the main contributors. When populations grow faster than economic growth rates, it creates an abundance of people who cannot afford to buy enough food or healthcare, let alone send their children to school. In addition, too much money is being spent on things like luxury goods and military spending instead of on necessary items like healthcare and education. This increases the number of people who are living in poverty out-of-reach of basic necessities.

To combat this issue, governments need to focus on creating jobs and increasing income levels. This will help more people afford basic needs like food and shelter without having to rely on government assistance. Additionally, preventing population growth from occurring in the first place is key. Governments can promote contraception and strengthen family planning programs in order to keep population growth under control. This will also save money down the line since there will be less demand for government assistance.


1. Inequality is a major cause of poverty in developing countries and economic growth.

Poverty is caused by many factors, including inequality. The World Bank reports that “inequality … has been consistently associated with lower growth rates and increased poverty” (Sachs et al. 2010). Inequality is the gap between the rich and poor in a society. It can be measured by income, wealth, or educational attainment levels.

Income and wealth are two important measures of inequality. Income includes wages, salaries, and other forms of earned income. Wealth includes assets such as homes, cars, and stocks. Educational attainment levels are also an important measure of inequality because they reflect access to education opportunities and resources.

There are many ways to reduce inequality. For example, governments can increase taxes on the rich to help reduce overall income disparities. They can also provide more education and job opportunities for low-income individuals to help them improve their access to resources and improve their chances for success in life.


1. Corruption: Corruption is rampant in many developing countries, and it greatly limits economic growth and development.

2. Lack of Infrastructure: Developing countries often lack the infrastructure necessary for healthy economic growth. This includes things like reliable transportation, adequate water supplies, and enough schools and hospitals.

3. Inadequate Labor Laws: Many developing countries have weak labor laws that make it difficult for workers to get fair pay and safe working conditions. This makes it harder for businesses to operate profitably, which in turn limits economic growth.

4. Poor Tax Policies: Many developing countries have tax policies that are designed to benefit the wealthy rather than the average person or business. This slows economic growth by limiting government revenue needed to fund important public services.

5. Over-regulation: Governments in developed countries tend to be overly-restrictive with business, leading to a slowdown in economic growth in these countries as well. This is because too much regulation can stifle innovation and creativity, which is essential for a thriving economy.

Lack of Infrastructure

There is a lack of infrastructure in developing countries, which hampers economic growth. This lack of infrastructure can be attributed to a number of factors, including natural disasters and environmental degradation. Inadequate transportation and communication networks, inadequate clean water supplies, and poor sanitation are also common problems.

Lack of infrastructure also affects the economy in other ways. Poorly developed roads and bridges make it difficult for businesses to get goods and services to market, and they also cause congestion. In addition, uninhabitable or damaged neighborhoods reduce the incentive for people to invest in new businesses or expansions within their current ones.

The government can play a role in addressing these issues by investing in infrastructure projects. However, this is not always feasible or desirable because of the high cost of such projects. Private sector investment can also help address infrastructure deficiencies, but often does so at a higher cost than public sector investment.


While economic growth is often seen as the key to solving poverty in developing countries, it is not the only factor. In this article, we explore five major causes of poverty and how they impede economic growth. We hope that by understanding these factors and taking them into account when planning development initiatives, we can help alleviate poverty in our community and throughout the world.

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