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1. Low natural resource endowment
Inadequate or absence of significant quantities of resources such as lands, favorable climate among others.
2. Inadequate capital
Capital refers to all productive wealth that is used either directly or indirectly in the production process. It may include items like machinery, equipment and inventory. In an economy where such capital is lacking or not adequate, there may be a problem in areas such as exploitation of resources, industrialization and employment opportunities.
3. Poor technology
Less developed countries are characterized with insufficient and poor technology. This has led to slow growth and development of their economies. Therefore the method of production and technical knowledge related to those methods are backward hence leading to slow economic development in those nations.
4. Poor human resource endowment
Human resource refers to the entire population in the economy that can be used in production of goods and services. Its size, social-cultural characteristics, composition and quality may determine the pace and level of development. Underdeveloped human resources can be a barrier to economic development. Less developed countries have shortage of skilled manpower despite their huge population. The education offered in such countries tends to stress on literacy and intellectualism and not on skills needed for exploitation of available natural resources. This has constituted to slow economic development in those countries.
5. Unfavorable domestic environment
The political, social and economic institution in a country make use of domestic environment. The quality of this environment determines the rate at which resources are utilized and capital accumulated. Absence or inadequate domestic environment in less developed countries has adversely affected development.
Dullayo answered the question on May 16, 2018 at 11:06
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