A variety of internal factors affect the economic development of third world countries. Such factors exclude outside influences like import costs, colonialism, foreign aid, external debt and other countries' economic policies, which also have a major impact. Internal factors affecting economic development often combine to create negative cycles that third world countries have difficulty escaping. Four important factors of this type include corruption, internal conflicts, natural disasters and poor infrastructure.

Internal Conflicts

Civil wars and ethnic violence impact a number of third world countries. The destruction caused by these conflicts reverses economic development. It also strongly discourages tourism and investment, while interrupting factory production. Internal conflict diverts government spending to the military, away from the development of infrastructure and other efforts to improve the living standard. Civil wars severely damage economies and worsen poverty levels to a significant degree, according to The Stanley Foundation.


The problems of corruption continue affecting many third world countries in a formidable way, though some have succeeded in mitigating it. Corruption decreases internal and foreign investment, while inducing the misuse of government funds. Bribe requests create barriers to a variety of economic activities. For example, it becomes difficult to start a small business, according to the UNODC. The most corruption exists in third world countries, such as Somalia, Myanmar, Iraq and Afghanistan, according to Transparency International. Although they have a range of political systems and varying development factors, each country continues to experience an ongoing armed conflict.

Natural Disasters

Floods, cyclones and other natural disasters have the most harmful impact upon third world countries, severely affecting development. The infrastructure often resists such disasters with less success than that of developed nations. Deforestation continues to pose a major problem in countries such as the Philippines and Ethiopia, worsening the impact of floods. Third world nations remain the most economically vulnerable to earthquakes, according to Forbes. After natural disasters, the economies of third world countries often have yet to resume positive development before the next disaster occurs.


Some third world nations possess little infrastructure; in others, once-costly infrastructure remains from a more prosperous time, now deteriorating. Limited internal funds for construction and maintenance lead to crumbling roads, power cuts, unreliable telephone service and similar problems. The above-mentioned factors of war, natural disasters and corruption contribute to this dilemma. Failing infrastructure disrupts internal and export-based commerce that requires transportation, also affecting factory output. For example, the poor condition of Indonesian seaports and roads decrease earnings and interrupt the production of manufacturers located there, according to the BBC.

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