A developed country is characterized by industrialization, economic performance, stability, quality of life, good infrastructure, and simple export regulations. Countries can develop by diversifying their industrial base, improving agriculture, and implementing free market strategies. However, market failures and structural issues must be addressed. Economic development models aim to increase savings and investment to lower the capital-output ratio and increase growth.

1. G.L BAJAJ INSTITUTE OF MANAGEMENT & RESEARCH
APPROVED BY AICTE, MINISTRY OF HRD, GOVT. OF INDIA
Rajdeep Majumdar GM18173
Rakesh Kumar GM18174
Ranjay Kumar GM18176
Rashi Jain GM18177
Rashi Sharma GM18178
Raushan Kumar Jha GM18179
UNDER THE GUIDANCE OF :
Dr. Anand Rai
What makes a country developed?

2. Progression???
Becoming more advanced on complex???
Improving by expanding???
Resulting in more and better ???
How our nations develop???
What makes a country 'developed'???

3. A Developed country is one that
has achieved a certain level of
industrialization and economic
performance.
 Stability
 Quality of Life
 Good infrastructure
 Simple Regulations related to Exports
 Industrialization
 Service Economy

4. DIVERSIFICATION
OF INDUSTRIAL
BASE
HARROD-DOMAR
MODEL
INWARD LOOKING
OUTWARD
LOOKING
AGRICULTURAL
DEVELOPMENT
FREE MARKET
STRATEGIES
PROBLEMS OF
MARKET FAILURE
STRUCTURAL
CHANGE

5.  Many developing countries too reliant on primary commodities.
 Expansion of industrial base would help avoid over-reliance on
these commodities.
 Subject to wide price fluctuations and instability

6. Finding ways of improving agricultural production and
productivity may be one route to promoting economic
development.

7.  Property rights – who has the right of ownership?
 Land reform – part of the process but not forced.
 International agreements – abolition of price controls and
trade liberalisation, buffer stock schemes.
 Productivity improvements – investment in capital, quality
seed, etc.

8. Differences in
Interest Rates
Flow of
Information
Control Over Water
SupplyCropping Pattern
The Growth Rate of
Production
Effect on
Production and
Productivity

9. The free market is an economic system based on supply and demand with
little or no government control. It is a summary description of all voluntary
exchanges that take place in a given economic environment.
 Opening up developing countries' markets to competition.
 Improvement of the price mechanism-aim to improve efficiency in the -
allocation of resources and the use of capital and human resources.

10.  Trade policy
 Government intervention
 Monetary policy
 Capital and foreign investment flows
 Banking and finance
 Wages and prices
 Regulation
Principles of a Free Market

11. 1. Externalities:
 Pollution
 Environmental Degradation
2. Public goods/merit goods-
who will provide if the state cannot afford to fill the gap?
3. Period of time to adjustment might mean that large sections
of the population would suffer

12. Plan for economic recovery to make the country creditworthy
again and to put in place the conditions for sustainable economic
growth.
Loans from IMF-in return:
Remove import controls
Make exchange rates fully convertible — often means devaluation of the
currency Privatization programme
Cutting of subsidies
Deregulation of markets
Balancing national budgets

13.  Prices tend to rise as subsidies removed and currency devalues
 Cuts in government spending and rise in taxes hits the most
vulnerable.
 Deflationary policies tend to cause unemployment.
 Social unrest can be common
 Living standards fall

14. Reducing the levels of protection
Encouraging investment flows
Publicising the country's trade and goods
 Economies of scale
Competition stimulates efficiency

15.  Erect protective barriers
 Subsidies domestic producers
 Import substitution.

16. Sources of economic growth
 Savings
 Investment to lower the capital/output ratio
Change in National Income (A Y)
Savings ratio(s)/Capital output ratio (k)
Δ Y= S/k

17.  Level of savings (s) = Average propensity to save (APS) – which is the
ratio of national savings to national income.
 The capital-output ratio = 1/marginal product of capital.
 The capital-output ratio is the amount of capital needed to increase
output.
 A high capital output ratio means investment is inefficient.
 The capital-output ratio also needs to take into account the depreciation
of existing capital.
 Level of savings:- Higher savings enable greater investment in capital
stock
 The marginal efficiency of capital. This refers to the productivity of
investment, e.g. if machines costing £30 million increase output by £10
million. The capital-output ratio is 3
 Depreciation – old capital wearing out.
in more detail…….