Measures to Break the Vicious circle: Measures to promote Capital Formation

We have seen above how the under- developed countries are caught up in the vicious circle of poverty and how this vicious circle is a great obstacle in the way o their economic development. Now we have to see whether the vicious circle of poverty can be broken and if so how. Modern economists are of the view that the vicious circle can be broken if an economic effort is made in such countries. The developed and rich countries of today were also poor at one time and reached their present stage of development and propensity buy somehow breaking the vicious circle of poverty. From the study of their economic history, we learn that the poor countries of today can also remove their poverty and reach the goal of a developed state through economic endeavor. We can , therefore break the vicious circle by stepping up capital formation the following measures.