FREEDOM CURES POVERTY WHERE GOVERNMENT FAILS
By Benjamin Powell
Why do some nations become rich while others remain poor? This has been a central question in economics since at least the time of Adam Smith. Today China, India, and Botswana are booming, and in the process lifting hundreds of millions of people out of wretched poverty. Yet most of sub-Saharan Africa not only fails to get rich, but is instead actually getting poorer.
Traditional mainstream economic-growth theory doesn’t help us much to answer the question.Through most of the 20th century it focused on models that assumed growth was a simple function of labor, capital, and technology. The new growth theory looks more to institutions and policy.