Internal Causes

Inadequate supply of basic raw materials e.g. minerals that lead to industrialization.

The existence of the various viscious circles.

a. Viscious circle of poverty

 

 

b. Viscious circle of small market

 

c. Viscious circle of population

 

d. Viscious circle of savings

 

Underdeveloped infrastructure. Both social and economic infrastructure is still poorly developed e.g. roads, schools, dams, railways, hospitals, etc, and yet form an important framework for economic recovery and progress.

Political instabilities. Large amounts of financial resources are often spent on military hardware, ignoring priority areas of production. Again, insecurity tends to scare off potential investors who would invest and encourage economic development.

 

Socio-cultural variables. The prevailing tendencies of traditionalism and conservatism, tend to block prospects of economic advancements. Capacity under utilization of resources, this limits the prospects of resource exploitation for economic development.

The poor education system that puts emphasis on on completing the syllabus but with no skills contributes to undervelopment. It therefore brings out job seekers with no marketable skills in addition to lack of innovation and creativity.

 

Inappropriate levels of technology. Most LDCs have low levels of science and technology. Their technology is still primitive. This leads to limited exploitation of their domestic resource potential.

 

Limited understanding of national and political issues has led to adoption of ambitious programmes which have instead led to economic stagnation. In Africa for example, the declaration of the "economic war" in Uganda, Ujaama in Tanzania are living examples.

Insufficient supply of entrepreneurs. Entrepreneurial and managerial skills and capabilities are still inadequate in LDCs. This has, consequently, resulted into gross mismanagement of enterprises that would contribute to economic development.

High population growth rates. This coupled with the problem of a high dependence ratio, has affected the level of production, savings and investment thereby limiting development.

Dependence on agriculture, especially in Africa, has led to deteriorating terms of trade. In addition, the sector is often faced with many risks and uncertainties.

 

Dualism poor countries are often characterized with different sectors at diff levels of development. This leads to the absence of an integrated society, thereby minimizing the levels of development.

Inappropriate management especially the in public enterprises has led to inefficiency and less production. This, too, limits economic development.

Underdevelopment in post countries is also attributed to inadequate supply natural resources e.g minerals.

The rampant rate of corruption and, wastage of financial resources by the public sector also limits the pace of development and economic progress.

Inadequate incentives of the population to increase the volume of output e.g. low and discouraging prices for agricultural products.

Government intervention, too, tends to discourage small private investment.

In developing countries, there is the obvious problem of the insufficient capital that contributes to the economic development.

Limited levels of industrialization tend to minimize the rate of economic development.

LDCs tend to have limited domestic consumer markets due to the prevailing incomes among the people. The low purchasing power also, limits the 1evel of production and development.

Poor planning mechanisms and policies also lead to limited level development.