One of the ways that a developing country’s (DVC’s) government could encourage economic development is by
a) reducing corruption and government meddling in the justice system b) encouraging home production and self-sufficiency c) nationalizing private industries d) paying families to have more children so that more output is produced
The correct answer and explanation is:
The correct answer is a) reducing corruption and government meddling in the justice system.
Explanation:
In a developing country (DVC), fostering economic development requires creating an environment where businesses can thrive, investments are attracted, and resources are allocated efficiently. Corruption and government interference in the justice system can significantly hamper this growth.
- Reducing corruption: Corruption in government institutions creates a barrier to fair and equitable resource distribution. It leads to the misallocation of public funds, discourages foreign and domestic investment, and raises the costs of doing business. By reducing corruption, the government can ensure that public resources are used for development purposes, rather than being siphoned off by unscrupulous officials. This would increase trust in the government, attract investors, and improve the general business climate.
- Improving the justice system: The rule of law is a cornerstone of economic development. In DVCs where the justice system is inefficient or corrupt, it is difficult for businesses to operate securely. Intellectual property rights, contracts, and property ownership need legal protection to allow entrepreneurs to take risks, invest, and innovate. A strong, impartial justice system provides businesses with the legal certainty that their rights will be protected and disputes can be resolved fairly.
In comparison, other options like encouraging home production and self-sufficiency (b), nationalizing private industries (c), or paying families to have more children (d) may not directly address the root causes of economic underdevelopment. In fact, excessive government intervention in the economy, such as nationalizing industries, can stifle innovation and lead to inefficiencies. Similarly, promoting population growth without investing in education, healthcare, and infrastructure might not yield the expected economic benefits.