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Why Are Some Countries Rich and Others Poor?

research.stlouisfed.org

51–60 of 110 posts

Re: Why Are Some Countries Rich and Others Poor?

#51
post #36

No mention of colonialism or imperialism here. Not the whole answer, but part.

Japan and Germany were completely devastated after WWII, on a scale we have never witnessed in our lifetimes, yet they rose out of the Ashes. So no, it's not colonialism. It has to be something less visible. Something that a country like Afghanistan for example severely lacks. You might point to dictatorships, but I would point to South and North Koreas. South Korea was ruled by a brutal dictatorship for decades , in…

I say moderate weather and higher percentage of fertile land.

Re: Why Are Some Countries Rich and Others Poor?

#52
post #36

No mention of colonialism or imperialism here. Not the whole answer, but part.

Japan and Germany were completely devastated after WWII, on a scale we have never witnessed in our lifetimes, yet they rose out of the Ashes. So no, it's not colonialism. It has to be something less visible. Something that a country like Afghanistan for example severely lacks. You might point to dictatorships, but I would point to South and North Koreas. South Korea was ruled by a brutal dictatorship for decades , in…

After WWII, the US invested /massively/ in Germany. Also, many people were trained in some profession, so even though everthing was destroyed, they knew how to rebuild it.

Re: Why Are Some Countries Rich and Others Poor?

#53

I'll save you all a click: The article answers the question with the following two points: - lack of strong institutions - trade barriers It provides an example of North vs south Korea in defense of the theory. It's a ridiculously simplistic synthesis in my opinion.

This criticism is always so weird. What should the article - not thesis note, ARTICLE - have been: 10 times longer?

It is almost like people expect comprehensive, bulletproof writing in under 1000 words.

Re: Why Are Some Countries Rich and Others Poor?

#54
post #7

As someone who migrated from a developing country(India) to a developed country(Australia) and observing the difference in quality of life of average citizens among the two countries, I always wonder why politicians/dictators from developing countries who can also observe these differences ever wonder that the average people in a developed country are living a good life so why not just copy what the developed country…

Because controlling people, who are struggling in their life, are much easier by dictators. Even with religious activities, dictators can make citizens pray for him. if politicians allow you to have lots of chances, then you'll start criticizing and want more. More improvement on life conditions gives you less control on citizens. I'm Turkish living in Switzerland, I can say that it is the same shit in every developi…

Which means that usual ways of dealing with dicators, i.e. econimic sanctions are counterproductive. They make average people poorer, and then less likely to revolt against their dictator.

Taking communist Poland as an example, people start revolution not when things are worst for them economically, but, paradoxically, when things start getting better, but not fast enough.

Polish people revolted against communists in 1980, which was at the end of the decade of economic growth, fueled by money that Edward Gierek borrowed from western banks.

Re: Why Are Some Countries Rich and Others Poor?

#55

Economists can sometimes be the equivalent to the priests of the past--basically making justifications for the ruling class. I was once passionate about economics and public policy... If we are to be honest about it, at some point you just realize that the world is much less nice than I imagined, and it's that way because of people's greed. That's not to say there aren't a fair good number of decent people out there,…

The beauty about free market economics is, it doesn't depend on people's niceness to maximize productivity, capital utilization and consequently the aggregate standard of living of a country. Supply and demand, and pursueing self interest will achieve all of this in the aggregate despite any localized exceptions.

Re: Why Are Some Countries Rich and Others Poor?

#56
post #32

Earlier quoted context omitted.

I'm not sure what you think I suppose to mean. The economic impact of colonialism is already an active area of study. I'm just pointing out that it exists.

The impact of colonialism is studied under the institutionalist approach to growth theory What is the institutionalist approach? What is growth theory? authors being Acemoglu and Robinson. Who? The submission doesn't elaborate on it, but the literature is out there. I'm not trying to be a smart-ass, but I'd like to know more after reading your comment than I did before.

Well, the submission itself has a section entitled "Institutions". Institutional economics is a field of economics that studies the impact of the strength, stability and overall design of "institutions", in the widest possible sense, on economic activity. Stuff like the impact of the credibility and strength of property rights or the impact of minority rule, for instance, goes in here.

Growth theory, or rather development economics, studies how and why wealth grows. And here go ... pretty much any economic growth models. I really don't know how else to say it.

Finally, an institutional approach to development economics studies how institutions might cause nations either grow or not, depending on their institutions, and the guys who kick-started this approach were Daron Acemoglu of MIT and James Robinson, of Chicago University. They have a book on it called "Why Nations Fail", released in 2012, which has already been recommended by another commenter. Their main thesis being that certain patterns of colonialism induce certain patterns of institutions, which they call "extractive", by which a minority appropriates most of a country's wealth for itself, while setting the country on a low growth path. The classic example being a resource-based economy under either a minority or authoritarian rule.

If this all sounds really general, that's because it is. I haven't read much on institutional economics, much less on the economics of colonialism. But I know it's out there.

Re: Why Are Some Countries Rich and Others Poor?

#57

Most rich countries are rich because they build their wealth on free labor (slavery), and this countries include USA, UK, France, Germany, Belgium, etc. Some are really poor because they've been exploited by the countries mentioned above (Africa and former German, British, Belgian, French colonies). Some are poorer because they've been destroyed by war multiple times (Poland).

> Most rich countries are rich because they build their wealth on free labor (slavery), and this countries include USA, UK, France, Germany, Belgium, etc

Don't stop there. Throw in Austria, Switzerland, Finland, Sweden, Norway, the Czech Republic, Slovakia, Croatia, Hungry, etc.

> Some are really poor because they've been exploited by the countries mentioned above (Africa and former German, British, Belgian, French colonies

Including Ethiopia, right?

> Some are poorer because they've been destroyed by war multiple times (Poland).

Poland is poorer, but not poor. It's in the top 50 of countries ranked by GDP adjusted for PPP: https://en.wikipedia.org/wiki/List_of_countries_by_past_and_...

Re: Why Are Some Countries Rich and Others Poor?

#58

There must be a definition of rich and poor. It should not be devised by looking at the wealth. It should be devised by looking at the living standards, education system, environment, law and order, equality, zero racism. And where people can live an anxiety/depression free life. Where there is welfare, care, love grows everyday for each other.

Sadly, that defines one race countries. No racism possible when there are no races but one.

Personally, I think this definition is bad because it progress free. Anxiety free is has no scale. If you are massively anxious I. Country A, and mildly anxious in B, both fail.

Need to rethink this.

Re: Why Are Some Countries Rich and Others Poor?

#59
post #56

Earlier quoted context omitted.

The impact of colonialism is studied under the institutionalist approach to growth theory What is the institutionalist approach? What is growth theory? authors being Acemoglu and Robinson. Who? The submission doesn't elaborate on it, but the literature is out there. I'm not trying to be a smart-ass, but I'd like to know more after reading your comment than I did before.

Well, the submission itself has a section entitled "Institutions". Institutional economics is a field of economics that studies the impact of the strength, stability and overall design of "institutions", in the widest possible sense, on economic activity. Stuff like the impact of the credibility and strength of property rights or the impact of minority rule, for instance, goes in here. Growth theory, or rather develo…

Bravo, thank you.

Re: Why Are Some Countries Rich and Others Poor?

#60
post #7

As someone who migrated from a developing country(India) to a developed country(Australia) and observing the difference in quality of life of average citizens among the two countries, I always wonder why politicians/dictators from developing countries who can also observe these differences ever wonder that the average people in a developed country are living a good life so why not just copy what the developed country…

This is a naive simplification. Why doesn't Infosys just copy Google and 10x its market cap? Big countries, like big companies, acquire a great deal of friction to get anything moving and institutions that make up the Goliath start getting riddled with corruption and mediocrity.

A policy change in itself can't change anything, unless, the change trickle down to the lowest level. And that rarely happens, because every level in the hierarchy has its own holes, inefficiencies, and corrupt practices.

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