Final answer:
Ferguson and Lohmann attribute the failure of development projects to political and cultural factors, including resource immobility and negative externalities. These elements hinder economic development along with challenges like population growth and limited resources.
Step-by-step explanation:
According to Ferguson and Lohmann, development projects often fail due to a complex interplay of factors that are not exclusively about insufficient financial resources or technological innovation. Notably, they point to political and cultural factors, which includes the inability of resources like labor and capital to shift to other markets, externalities, which can be unintended positive or negative side-effects, and the inherent ethnocentric biases in modernization theories that often overlook certain political dynamics. Additionally, the challenges of economic development such as rapid population growth and limited resource availability often align with Ferguson and Lohmann's perspective on development failure.
The economic consequences of immobility of resources are profound, with possible stagnation and inefficiency within markets. In terms of private sector involvement, Ferguson and Lohmann might agree that markets tend to underprovide incentives for new technology due to issues such as inadequate competition and information asymmetry.