Searching For Causes of Poverty & Prosperity

In the West, we live in prosperity but are often unaware of the sources of that prosperity. We even think we have some special insight into the causes of prosperity because we’re wealthy. At the extreme it’s like my offering to wire your house because my lights turn on. Ask a random sample of business leaders and development experts about what causes poverty and wealth, and most assuredly they will talk about geography or infrastructure, electricity, education, healthcare. No doubt these are important. Sickness and disease are real obstacles to economic development and human flourishing. Poor roads and unreliable electricity make it difficult to operate businesses and transport goods to market. And lack of education keeps people in low-productivity jobs and prevents people from reaching their full potential. But starting with these things distract us from core institutions of justice that ultimately underlie their development. One way to think about this is to ask yourself this question: If you have a highly educated, healthy person with access to healthcare and good roads and bridges, but who cannot get clear title to his land, cannot get access to justice to get his court case heard, cannot register his business in the formal economy, and cannot get access to capital and credit, what do you think he will do? I suggest there are four options: despair, join the political class, join the criminal class, or migrate. Read Full Article »