Developing Economies

Why Some Countries Go Bust

Indian fire brigade officials use water jets to control a fire in the Garibnagar slums. i i
INDRANIL MUKHERJEE/AFP/Getty Images
Indian fire brigade officials use water jets to control a fire in the Garibnagar slums.
INDRANIL MUKHERJEE/AFP/Getty Images

Below is an excerpt from Adam Davidson's latest New York Times Magazine column, "Why Some Countries Go Bust." Read all of Davidson's Times Magazine columns here.

Why are some countries rich while others are poor?

Over the centuries, proposed answers have varied greatly...Thomas Malthus said poverty comes from overpopulation; and John Maynard Keynes claimed it was a byproduct of a lack of technocrats. (Of course, everyone knows that politicians love listening to wonky bureaucrats!) Jeffrey Sachs, one of the world's most famous economists, asserts that poor soil, lack of navigable rivers and tropical diseases are, in part, to blame....The list goes on.

Now, in their new book, "Why Nations Fail," Acemoglu and his collaborator, James Robinson, argue that the wealth of a country is most closely correlated with the degree to which the average person shares in the overall growth of its economy...when a nation's institutions prevent the poor from profiting from their work, no amount of disease eradication, good economic advice or foreign aid seems to help.

I observed this firsthand when I visited a group of Haitian mango farmers a few years ago. Each farmer had no more than one or two mango trees, even though their land lay along a river that could irrigate their fields and support hundreds of trees. So why didn't they install irrigation pipes? Were they ignorant, indifferent? In fact, they were quite savvy and lived in a region teeming with well-intended foreign-aid programs. But these farmers also knew that nobody in their village had clear title to the land they farmed. If they suddenly grew a few hundred mango trees, it was likely that a well-connected member of the elite would show up and claim their land and its spoils. What was the point?

Read the full column here.

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