The concept of "poverty trap" is a very common mechanism among developing countries, since there are a series of social factors, economic and conjunctural that make economic development of these nations impossible and plunge them into a self-maintained state of poverty. But what exactly does the poverty trap consist of and what are the factors that influence its appearance? Pay special attention.
What does the poverty trap measure?
When a humble or developing country cannot get out of the situation of poverty in which it finds itself, we are talking about the poverty trap, the opposite side of the prosperity economical. This is so because there is not enough savings to make productive investments that allow them to get out of that situation, which translates into a null capacity to grow economically, financially, socially and culturally.
Causes that favor the poverty trap
This self-maintaining mechanism that prevents the socioeconomic development of a nation is mainly due to the following reasons:
- War context.
- Existence of dictatorships or cases of political corruption.
- Drought, famine or epidemics.
- Absence of industry and infrastructure.
- The plunder to which many of these countries are subjected by richer and more developed nations.
- Capital flight.
- Limited access to credit and capital market.
- Market failures in the country's economy.
- Unfavorable environmental conditions.
- Lack of basic health or education services.
- Lack of exchange of tax information.
- Uneven distribution of wealth.