The causes for instability and
poverty in countries that are less developed is shown below:
- Domestic resource mobilization- The
least developed countries are not able to build capacity in order
to locally mobilize their financial resources. The finances can be
raised in least developed countries if taxes are collected and
managed effectively by the government. It stand to be inevitable
that least developed countries still have a heavy reliance on
assistance from foreign countries in order to harness opportunities
and enhance institutional and technical capacities for mobilization
of resource in a n efficient manner.
- Lack of economic diversification-
Least developed countries have high dependencies on primary
commodities due to which they experience high volatility in prices
of the commodity due to which there exist imbalance in the economic
instability and balance of payments.
- Shortage of means of
implementation- least developed countries generally come across
lack of support at a global level when it comes to means of
implementation including lack of token technology transfer,
divergence between monies actually delivered and pledged financial
assistance and lack of reform to persistently unfavorable trade
regimes.