To what extent is under development in the “third world” a result of external factors?

• Brain drainage. Foreign economies often attract skilled man power that are highly required in developing countries
• High prices for petroleum products lead to high foreign exchange expenditure leaving less for development
• The IMF has a great influence on the development programs of LDCs but with limited funding.
• Repatriation of interests by foreign investors limits expansion of the economy
• Liberalization policies encourages dumping to LDCs and suffocates domestic industrial development and overdependence on foreign nations.
• Slave trade robbed Africa of labour force and this could have contributed to underdevelopment
• Limited external market due to protectionism
• Colonial historical exploitation and oppression

However, there are also several internal factors that are responsible for underdevelopment of LDCs

• Under developed infrastructures such as roads, schools railways, etc.
• Political instability discourages investment
• Limited technology
• Low entrepreneur skills
• High population growth rates leading to high dependence rate
• Dependence on low yield agricultural practices
• Rampant corruption
• Low innovations
• Lack of enough domestic market for its produces
• Low level of industrial development leading to unemployment.