Need an research paper on how can inequality undermine the development of a country. Needs to be 7 pages. Please no plagiarism. Economic equality is key to sustaining economic development since the distributive percent of the population controls the economy.
When there is a continued increase in output of goods and services, be it total or per capita, there is economic growth. In the same vein, economic growth means additional earnings of the country which could be used for public services and additional earnings of its citizens (Nissan, Edward, Niroomand, Farhang 2012). Smith (cited in Nissan, Edward, Niroomand, Farhang, 2012) presented two growth themes namely classical sectoral analysis and classical aggregate growth. he defines classical sectoral as a performance of individual industries and their contribution to the growth process while the classical aggravate growth “provides explicitly the growth path subject to technical change due to division of labor”(website). Smith also said that technical, scientific and commercial specialization occurred as a result of a division of labor (Smith 1776).
Proponents of social capital led by argued that. whenever there is a continued increase in output of goods and services there is economic growth (Castano 2007, website). Castano (2007) studied the effects of social capital on economic growth through family, associations, informal links, links in places of work and the state. Social connections were discovered to enhance trust networks that gave rise to reciprocity among members and therefore contributed to one’s social capital. This line of thought argued that there exists a positive effect of social capital on the economy in the family and association network when they mobilize their financial resources to create companies or keep them running (Castano 2007). In addition, the state has a role to play in promoting social capital. Castano (2007) mentioned three important roles played by the state as. regulating the legal framework, promoting associative activities and promoting public education (Castano 2007). We must admit that the state plays a key role in promoting social capital. However, the state has its weakness in the form of slow legal procedures, corruption and civil strife that would hinder the development of social growth.