Low Income Levels and Productivity

At very low income levels, in fact, a vicious cycle may set in, whereby low income leads to low investment in education and health as well as plant and equipment and infrastructure, which in turn leads to low productivity and economic stagna- tion. This is the well-known vicious cycle referred to variously as the poverty trap

Indeed, income growth rates have varied greatly in different developing regions and countries, with rapid growth in East Asia, stagnant growth in sub-Saharan Africa, and intermediate levels of growth in other regions. Problems of igniting and then sustaining economic growth are examined in depth in

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