Factors that Affect Economic Development: Population, Conflict, Geography & the Environment

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  • 0:02 What Is Economic Development?
  • 0:55 Population
  • 1:46 Conflict
  • 2:50 Environment & Resources
  • 3:38 Lesson Summary
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Lesson Transcript
Instructor: David Wood

David has taught Honors Physics, AP Physics, IB Physics and general science courses. He has a Masters in Education, and a Bachelors in Physics.

After watching this video, you will be able to explain what economic development is and describe some of the factors that affect economic development and how they do so. A short quiz will follow.

What Is Economic Development?

Economic development can mean a lot of different things. It can just refer to any growth in the value of an economy as a whole. But more generally, economic development is the continued, active efforts of the public and private sectors of a country that promote the standard of living and economic health of the country. The economic health of a country relates to the economic growth of the country (the dollar value growth I already mentioned) and the general freedom and competitiveness of the market in the country. Generally, as a country becomes more economically developed, the well-being of its citizens improves in a lot of ways: their health, education, security, freedom, and self-sufficiency.

But what factors affect economic development? In today's lesson, we're going to go over a few of the most significant factors that affect economic development: population, conflict, and environment.


The effect of population growth can be positive or negative depending on the circumstances. A large population has the potential to be great for economic development: after all, the more people you have, the more work is done, and the more work is done, the more value (or, in other words, money) is created. So, surely this can be nothing but good. There's a reason that farmers often have a lot of kids - more kids means more workers.

But, unfortunately, it isn't that simple. In a country with abundant resources and money - a rich country - perhaps more people is a good thing. But that isn't always the case in countries with limited resources. Limited resources and a larger population puts pressures on the resources that do exist. More people means more mouths to feed, more health care and education services to provide, and so forth. So, population can be a mixed bag.


Conflict, like population, is complex. It's generally accepted that a lot of conflict in an area is terrible for economic development. The constant wars in Iraq and the surrounding areas, for example, has had a terrible impact on their economic development. Not only do wars cost money but also private companies like stability - wars aren't remotely stable, which creates a lot of risk. And when a country comes out of a war badly, a lot of their buildings and infrastructure can be destroyed in the process. The world wars were so expensive for the United Kingdom, for example, that it brought about the ultimate end of the British Empire.

But then there are isolated examples of how wars can boost countries or certain industries. Whenever we develop weapons and war machines, we usually invent a lot of things in the process, and those things not only help us wage war but also help us revolutionize the way ordinary citizens live. The development of the tank was important for war but also for building cars and trucks. And those industries were ignited by the world wars. So, while conflict usually has a negative effect on economic development, this can be a mixed bag, too.

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