What is a Developing Economy? - Definition, Characteristics & Features

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  • 0:00 Definition of a…
  • 0:41 Population
  • 1:24 Economy
  • 2:27 Features
  • 3:11 Lesson Summary
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Lesson Transcript
Instructor: Flint Johnson

Flint has tutored mathematics through precalculus, science, and English and has taught college history. He has a Ph.D. from the University of Glasgow

Learn about what a developing economy is by seeing what makes up a developing economy. When you are finished take the quiz and see what you've learned.

Definition of a Developing Economy

I have running water and access to electricity in my house. Does that make my own economy developed? How about if I have several major industries working within twenty miles of me? No one really has a definition for what a developing economy is. The United Nations, for instance, has stated there is no objective way of defining the term.

International Monetary Fund (IMF) Map by Economic Levels: Blue=Developed, Orange=Developing, Brick=Undeveloped
Economic Map of the World

As a rule, though, a developing economy is one where people have a lower standard of living and less developed industries than other countries. However, it's all relative. Nineteenth-century Britain was the most developed country in the world, but if you put it into the modern world it might be considered a developing economy.


One of the easiest ways to determine whether a country has a developing economy is in the population. Developing economies tend to have higher birthrates. Traditionally, it has been necessary to have a higher birthrate to maintain the population against diseases and bad living conditions. In a developing country things are a little better, but the lack of contraceptives and sex education means that people keep having babies.

Death rates are also higher and life-spans are shorter because medical care isn't quite as good as in developed economies, but it doesn't compensate for the high birthrate. Because of that, the population in a developing economy rises much faster than in a developed economy.


A developing economy can also be determined in part by the way an economy makes money. In a developing economy a country relies on its natural resources. In a developed economy the country makes use of information and communication technology - computers and the Internet.

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