Non-economic or Institutional Factors

Thus far we have dwelt on the economic factors but perhaps equally powerful are the various non economic forces like the social and political factors . In kaldor’s words, “ A study of the dynamics of economic growth leads beyond the analysis of economic factors to a study of the psychological and sociological determinates of these factors.” Karl Marx also emphasized the inter relationship between institutional factors and economic change Let first take the political factors, which include political sovereignty of the country. The complexion of its government whether it is development conscious or is completely laissez faire in its outlook or is dominated by vested interests who would oppose bitterly any departure from the status quo the quality of administration, and the political ideology of the government, particularly in relation to problems of development.