Because most developing countries have week domestic industries, they do not benefit from D. Free-trade policies.
A. "World Bank loans" is incorrect because loans from this bank have the objective to provide resources for developing countries so they can develop any sector of its economy, a country could invest that money in domestic industries so it can be benefited from it.
B. "IMF advice" is incorrect because this institution gives advice to developing countries so they can implement certain policies to improve its economic development. As developing countries have weak domestic industries, implementing IMF advice might benefit them to improve its economy.
C. "Foreign Aid" is incorrect because foreign loans can be very beneficial to improve domestic industies within a developing country.
D. "Free-trade policies" is the correct answer because the weakness of domestic industries in developing countries cause that free-trade policies generate a commericial deficit due to the fact that the domestic production is not enough competitive to contend with foreign production which is cheaper and with better quality.
This means that in developing countries, the country wouldn't be able to produce goods with lower or similar prices as the foreign goods and, much less compete in foreign markets.
