Catching Up

What LDCs can do, and how others can help

image of Catching Up
Despite solid gains made during the last decade, the Least Developed Countries (LDCs) are not keeping pace with other countries and the gap between them and the rest of the developing world has in fact widened. This means that LDCs will have to progress even faster to avoid being left further behind.

In this publication, economist and award-winning author of The Bottom Billion, Paul Collier, suggests a menu of strategic policies around which governments might rally that could help LDCs to reduce this differentiation. He argues that the only actors who can lead this process are the governments of LDCs themselves working together towards clear and well-founded goals.

He emphasises the need for effective change and highlights potential future problems associated with the management of natural resources and the threat of climate change. Implementing the right policies, he argues, is essential if LDCs are to catch up and not become detached from the rest of mankind.



Regional Integration

Most LDCs remain predominantly rural. All have small economies, andmost also have small populations.As the above discussion of industrialisation indicates, modern economies are characterised by scale economies which accrue in cities. Such scale economies are not confined to manufacturing: they also apply to themany service activities which in amodern economy employ most people. Countries that are small and predominantly rural are not well placed to reap such scale economies. Their populations are spatially dispersed and their national markets are too small. The costs of being small are partly that urban scale economies cannot be achieved, and partly thatmarkets are too thin and therefore uncompetitive.


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