Answer to Question #283745 in Macroeconomics for ABEX

Question

39. Why is that difficult to escape underdevelopment in a polarized society?

How does this explain the fact that middle income countries grow faster

than both low and high income countries?

Answer 1

Solution:

It is difficult to escape underdevelopment in a polarized society since polarization tends to segregate the society resulting in factors such as income and wealth inequality, displacement of economy, and a spike in housing pricing thus differentiation of social groups into high-income and ow income. These issues caused by a polarized society make it extremely hard for development to take place within a society.

 

Middle-income countries have a balanced society, that is the gap between the wealthy and the poor is small compared to low-income and high-income countries. Therefore, middle-income countries have a GDP growth that is faster than that of high-income and low-income countries. As such, these countries are able to economically develop and grow faster than others.