Cambridge IGCSE Economics 0455
Syllabus points
- Explain the reasons for differences in development between countries.
- Explain the roles of natural resources, investment, education, trade and other factors.
Why countries differ in development
Countries develop at very different rates. The main reasons include:
- Natural resources — countries rich in useful resources (oil, minerals, fertile land) can earn income to develop, though some become over-dependent on one commodity.
- Investment in capital — more factories, machinery and infrastructure raise productive capacity.
- Education and skills — a healthy, educated workforce is more productive.
- Healthcare — a healthy population works and learns more effectively.
- Trade — access to world markets lets countries specialise and earn export income.
- Political stability — peace and good governance encourage investment; conflict and corruption hold development back.
- Access to finance — savings and foreign investment fund growth; heavy debt drains resources.
Development depends on resources, investment, education, health, trade and stable government working together.
Key definitions
| Term | Definition |
|---|---|
| Developing country | A country with relatively low income, output and living standards. |
| Developed country | A country with high income, output and living standards. |
| Infrastructure | Basic facilities such as roads, power, water and communications. |
The development gap
The development gap is the difference in living standards between rich and poor countries. It tends to widen when poor countries lack the investment, education and stability needed to catch up.
Worked example
Two countries start with similar incomes. Country A invests in schools, roads and healthcare and trades openly, so productivity and incomes rise steadily. Country B suffers conflict and relies on one export whose price collapses, so it stagnates. Over time a large development gap opens between them — showing how these factors combine.
Common exam mistakes
- Giving only one reason — development depends on several factors together.
- Assuming natural resources guarantee development (they can be mismanaged).
Exam technique
Explain several factors and how they interact, and note that reliance on a single commodity or political instability can hold a country back.
Quick revision
- Development differences: resources, investment, education, health, trade, stability.
- The development gap widens without investment and stable governance.