Basic Characteristic of developing economics


Characteristic of Developing Economics

The term developing countries usually refers loosely to countries or regions with level of real income and capital per head of population which are low by the standards of North America, Western Europe and Australasia. In developed countries, there is no large scale agriculture and industry, subsistence production is generally important and markets are comparatively narrow, and manufacturing industry is usually comparatively unimportant.

Low level of living

In developing nation general level of living tend to be very low for the vast majority of people. These low level of living manifested quantitatively and qualitatively in the form of low income(poverty), inadequate housing, poor health limited or no education, high infant mortality, low life and work expectancy, and in many cases a general sense of malaise and hopelessness

  Per Capital National Income

Another characteristic of developings countries is that real per capital income is low because real national income is low and population growth rate is higher. (per capital income is equal to Real National  Income divided by population.)


In addition to struggling on low income many people in developing countries fight a constant battle against malnutrition, disease and ill health. In the least developed countries of the world, life expectancy  average 49 years, compared with 57 years among other third world countries and 72 years in developed  countries.

 Dualistic Economy

Dualism means social and economic division in the economy. Developing countries characterized by dualism. In developing countries both market economy which is well developed and subsistence economy which is primitive and backward exits side by side

 Natural Resources

There is a shortage of natural resources in the developing countries and also these are underutilized due to shortage of capital, skill, knowledge and technology.

 Lack of Organizational Abilities

In developing countries due to low level of education experience and training. There is a shortage of leadership and organizational abilities.

 Shortage of Capital

Another common characteristic of developing countries is that there is a shortage of capital because of l ow level of income, low rate of saving, low rate of investment and unequal distribution of wealth.

 High Rate of Population Growth

Another common characteristic of developing countries is that there is a population pressure because o f high rate. On one side birth rate is increasing and on other side death rate in decreasing due to better health facilities. Population growth rate in most of the developing countries is in 2.5 per annum.

 Basic infra Structure

In developing countries basic infra structure is weak. So which is the basic cause of under development of agriculture and industrial sector. So the per capital income in these sectors is low which has decreased  the saving capacities.


In developing countries like Pakistan, people have the habit of hoarding precious metals, stones and currency. Gold and silver are use as ornaments instead of productive purposes.

 Unorganized money market and capital market

The money market is unorganized. They are not channelizing saving into investment efficiently, Due to unorganized market sale and purchase of the shares. Securities bond is not up to the mark            

Limited use of technology                                         

In developing countries people cannot use modern technology due to shortage of capital. Labour is unskilled, untrained and uneducated. Modern means of production not used due to which industrial and agricultural sector is low which has decreased the saving capacities

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