On the reasons for underdevelopment, the third world, global poverty, call it what you will.

Why are some countries still so poor? Is it corruption? Exploitation? Lack of education? AIDS? Malaria? Globalization? Conflict? Overpopulation? Or some combination of these?

And who is to blame? Big corporations? The World Bank? Poor country governments? Rich country governments? Poor country people in general?

I believe that there is actually a simple reason for the division of the world into rich and poor countries. We can understand almost all the differences we see in terms of this one thing. Poor countries just lack their fair share of industries like manufacturing, finance, and transportation. These activities have a natural tendency to cluster together because they create, by their presence, an environment which is favourable for other such activity.

Rich countries are simply those which are lucky enough, for historical reasons, to have a great deal of this clustered activity. They remain rich because the activity there is attractive to more activity. Poor countries are the ones that got left out as these industrial clusters formed.


So none of the above suspects is really the arch villain, although some do play a role in the story. But we need to understand the global pattern of rich and poor countries as a natural consequence of the way the global economy works. Then, we need to think about what could be done. The world does not lack the resources to end hunger. There is no need for children to die of diarrhea.

Most particularly, the people of poor countries are not to blame for their own problems. It is common to hear it said or implied that they are. Even U.S. president Obama recently said, in a speech in Ghana, that “Africa's future is up to Africans”. Of course, Africans have some control over their own future, but we need to understand the straight jacket they are in. And if the implication is that Africa's present is the way it is because Africans messed up their past, I don't agree.

Obama talks about the need for improved governance. But we need to understand why poor countries tend to have such bad governance. We need to understand that improving governance is more easily said than done, and will not be enough unless it leads to industrialization. We cannot necessarily assume that it will.


If you find these ideas interesting, you can find out more in this free, on-line book. You can download it in PDF form (better for printing) or browse it chapter by chapter on your web browser (better if you have a slow connection).

rich land, poor land

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