Why is the family fundamental for the economic development of a country?

Traditional families composed of strong and stable relationships are key to the growth and development of a country, as they make a difference in the lives and education of people, directly affecting their performance within society. This, in consequence, affects their productivity, behaviors, savings, and investments, thereby creating roles and responsibilities that lead to the improvement of individuals' quality of life.

The family, in addition to being an agent for the accumulation of physical capital, is the only entity capable of generating human capital, making it fundamental for economic growth.

This institution will continue to be the foundation of any society due to its contribution being of a decisive nature that promotes true development. People's purchasing power increases through better resource management, moderating consumption with a view to the future – a concept we call hope – and increasing their capacity for savings and investment.

In addition to the primary value of being a key element for generational change, without which there would be no renewal of human capital, the family produces positive synergies among its members, as well as between its members and external agents. This increases individuals capacities, that is, the accumulation of human capital, through experience and learning.

The well-consolidated family possesses the necessary stability and confidence to look to the future. It is within the family that the main productive activities arise. Statistics tell us that family businesses contribute to more than half of the global GDP. Delving deeper, they are the sole entities that possess efficient affective and emotional capacities for the development of the individual, enabling the generation of autonomy that parents desire for their children. The family is the place where individuals establish their values and learn about charity and virtues.

It is impossible for any government or institution to replace this function, as we witnessed in the USSR. In general, governments cannot efficiently take care of children, as they lack the roles of both a mother and a father, and their interests differ from those that parents have for their children.

Furthermore, governments lack the altruistic effect that, according to Becker, is crucial for efficient investment in human capital. Hence, governments should avoid misusing their resources by directing policies that weaken the family institution. On the contrary, they must implement policies that strengthen, defend, and promote it, while allowing relationships to develop with long-term incentives, thereby promoting the growth of the countries and the development of society.

In summary, I once again emphasize the functions of the traditional family, which are irreplaceable and pivotal for economic development and growth.

Firstly, marriage provides a stable link and a fundamental condition for projection and planning.

Secondly, the ability to procreate is subject to the marriage bond.

Thirdly, the family's role in creating human capital is not only about giving life but also about educating and forming new citizens.

Fourthly, the joint capacity of parents and children to generate positive externalities for the benefit of third parties. Clear examples are the thousands of family businesses that arise from the kinship and trust of members, which consequently generate the accumulation of physical and human capital essential for economic growth.

Fifthly, it is the function of generating social capital.

Sixthly, it involves being supportive of the family bond or network that favors the development of physical, human, and social capital.

Lastly, the legal affinity linked to the surname or relationship lasts over time, facilitating the adoption of measures in the medium and long term.

Juan Pablo Rodriguez Falcon