How to make poor countries rich?

[Collin Li]

What I think: sound economic institutions.

It means that people ought to be able to own the fruits of their labour, have their property protected from confiscation (presumably by the State) and theft, and people should be free to trade with others, whether it is domestic or abroad. With these simple principles put into play, this will trigger a foreign investment explosion that will help to improve the incomes and employment of poorer nations around the world - through mutually voluntary, and hence beneficial trade.

[costargh]

how will property be protected against theft (not so called government theft, but john smith stealing mark anthonys bread)?

[Collin Li]

At first, individuals will have to waste a lot of effort in being vigilant from thieves. As countries increase in GDP, they can afford to improve policing of law and order, which will set the incentives straight for self-interest via the benefit of others (trade and cooperation), rather than through theft and other forms of coercion.

[marbs]

or you could heavily invest in technology like ireland, and rise up into the top 'three' richest counties

[Glockmeister]

how will property be protected against theft (not so called government theft, but john smith stealing mark anthonys bread)?

A strong and non-corrupt police service does wonders for this.

[bturville]

..get rid of Mugabe?

[SoLe!]

give them all ur monies. In answer to your question...i think that there are 3 keys
A capable leader
No foreign debt
strong infrastructure
SO, if we were to remove all foreign debt, get them to elect someone 1/2 (preferably all) smart (mugabe you fail at runningz a country, i could do better) and then encourage investment in that country, they would be well on the way to helping Australias global domination plans.

[Collin Li]

give them all ur monies. In answer to your question...i think that there are 3 keys
A capable leader
No foreign debt
strong infrastructure
SO, if we were to remove all foreign debt, get them to elect someone 1/2 (preferably all) smart (mugabe you fail at runningz a country, i could do better) and then encourage investment in that country, they would be well on the way to helping Australias global domination plans.

Well, I'm not sure if that sort of charity will help. If you put a carrot at the end of a stick, people will chase after it. Put a carrot at the end of the road for those who are in poverty and those who might have tried to earn themselves a living will prefer poverty instead.

I recommend my earlier prescription: sound economic institutions. A lot of the problems are caused by government's reluctance to allow their citizens to own land, farm it for themselves and take care of it by themselves. When people have property, they will take care of it. If it's not theirs, they have no incentive to develop it, they have no incentive to take care of it.

[costargh]

how will property be protected against theft (not so called government theft, but john smith stealing mark anthonys bread)?

A strong and non-corrupt police service does wonders for this.

I'd question this. I think the root of the problem in poor countries and trying to eliminate theft is culture and the circumstances.
If you think of the level of theft as a disease then you would see that preventing the disease from occuring works much better than treating the disease.
This imo can be reflected in developing a culture that looks down at theft, is built on strong values (perhaps some that are underpinned in certain religions?) and by teaching kids from a young age right from wrong.
If you have a culture of people who are used to stealing, then no police force will be able to stop them in practise.

[brendan]

outsourcing the econ assignment eh

[Collin Li]

outsourcing the econ assignment eh

It's already submitted

[xox.happy1.xox]

Doesn't World Vision work...? Aww

[excal]

Doesn't World Vision work...? Aww

It's only a stopgap measure - it doesn't address the underlying causes. Mind you, it may have a role in changing the culture of a country (having contact and communication with those in a country with liberties and prosperity as a result) by the flow of information.

While sound economic institutions are a positive step in developing an otherwise impoverished country (take a look at Taiwan and South Korea over the last 100 years), these institutions do not address the issue of culture as costargh mentioned. What this alludes to is rejection of (sudden) change - a culture can take a long period of time to slowly change its ways, particularly if the method of thinking is quite ingrained.

Take Somalia for example, which is essentially an anarchy. The warlord vs. warlord warfare in the streets of Mogadishu is a true reflection of the tribal roots of their society. This is not dissimilar to other conflicts in the region.

Mind you, the market for mercenaries in Somalia is about as good as it gets, I've read.

The point is, you can't reasonably expect a free market to succeed where people have the thought process of 'I have a gun, I know what to do if some guy rips me off'. Or perhaps the notion of 'individual responsibility' where such responsibility is seen to be governed by who's the better shot at the AK47.

Change the culture first, then economic institutions will succeed.

[Collin Li]

Culture is governed by a more fundamental notion: incentives.

Culture is the result of constantly successful set of beliefs and values.

[excal]

Culture is the result of constantly successful set of beliefs and values.

Constant success is an issue of perspective. We may see the violence of, using my example, Somalia to be a disaster - but to them, it's a way of life.

Going to the issue of incentives - the incentive to do X may be weaker or stronger depending on the environment in which X is performed. Suppose X is the act of stealing a store owner's goods. In a country like ours, there are strong disincentives against this - but in a turbulent and lawless country, such disincentives do not exist - and given that the protection of property is a cornerstone of capitalist belief, it obviously cannot succeed in these environments. Not yet, anyway.