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Making Poor Nations Rich: Entrepreneurship and the Process of Economic Development
Why do some nations become rich while others remain poor? Traditional mainstream economic growth theory has done little to answer this question―during most of the twentieth century the theory focused on models that assumed growth was a simple function of labor, capital, and technology. Through a collection of case studies from Asia and Africa to Latin America and Europe, Making Poor Nations Rich argues for examining the critical role entrepreneurs and the institutional environment of private property rights and economic freedom play in economic development. Making Poor Nations Rich begins by explaining how entrepreneurs create economic growth and why some institutional environments encourage more productive entrepreneurship than others. The volume then addresses countries and regions that have failed to develop because of barriers to entrepreneurship. Finally, the authors turn to countries that have developed by reforming their institutional environment to protect private property rights and grant greater levels of economic freedom. The overall lesson from this volume is pro-market reforms are essential to promoting the productive entrepreneurship that leads to economic growth. In countries where this institutional environment is lacking, sustained economic development will remain illusive.
- GenresEconomics
480 pages, Paperback
First published January 1, 2007
3 people are currently reading
71 people want to read
About the author
Benjamin Powell
128 books18 followersBenjamin Powell is the Director of the Free Market Institute at Texas Tech University and a Visiting Professor in the Rawls College of Business. He is the North American Editor of the Review of Austrian Economics, past President of the Association of Private Enterprise Education, and a senior fellow with the Independent Institute. He earned his B.S. in economics and finance from the University of Massachusetts at Lowell, and his M.A. and Ph.D. in economics from George Mason University.
Professor Powell is the author of Out of Poverty: Sweatshops in the Global Economy (Cambridge University Press: 2014), editor of Making Poor Nations Rich: Entrepreneurship and the Process of Development (Stanford University Press: 2008) and co-editor of Housing America: Building Out of a Crisis (Transaction: 2009). He is author of more than 50 scholarly articles and policy studies. His primary fields of research are economic development, Austrian economics, and public choice. Dr. Powell's research findings have been reported in more than 100 popular press outlets including the Wall Street Journal and the New York Times. He also writes frequently for the popular press. His popular writing has appeared in the Investor's Business Daily, the Financial Times (London), the Christian Science Monitor, and many regional outlets. He has appeared on numerous radio and television shows including, CNN, MSNBC, Showtime, CNBC, and he was a regular guest commentator on Fox Business's Freedom Watch.
Professor Powell is the author of Out of Poverty: Sweatshops in the Global Economy (Cambridge University Press: 2014), editor of Making Poor Nations Rich: Entrepreneurship and the Process of Development (Stanford University Press: 2008) and co-editor of Housing America: Building Out of a Crisis (Transaction: 2009). He is author of more than 50 scholarly articles and policy studies. His primary fields of research are economic development, Austrian economics, and public choice. Dr. Powell's research findings have been reported in more than 100 popular press outlets including the Wall Street Journal and the New York Times. He also writes frequently for the popular press. His popular writing has appeared in the Investor's Business Daily, the Financial Times (London), the Christian Science Monitor, and many regional outlets. He has appeared on numerous radio and television shows including, CNN, MSNBC, Showtime, CNBC, and he was a regular guest commentator on Fox Business's Freedom Watch.
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Displaying 1 - 3 of 3 reviews
August 6, 2008
The book is split into three parts: 1. Theoretical discussion 2. Case Studies of poor economic performers 3. Case Studies of good economic performers.
Two of the four chapters in part 4 are EXCELLENT. The case studies, however, are uninformative. They tend to be 20 page descriptions of how a country's economic freedom score(s) is correlated with growth. There is ZERO explanation specific to that country for why that growth is caused by economic freedom. Instead they give specific history/background for the country, and then repeat the theory from the first part of the book to explain why they think economic freedom may be the reason for observed growth/lack there of.
The chapters do, however, tend to have pretty good descriptions of why growth was not caused by other, non-institutional, factors. The problem is that a book entitled "Making Poor Nations Rich" promises a little more than "institutions that protect property rights coupled with deregulation must cause growth because we're essentially libertarians who have eliminated many (but not all) other possible explanation for growth (and explanations for development generally)." Not that I don't think open markets/economic freedom is a great thing. I'm just saying there's very little that's new in here, and even very little that's explanatory.
Do yourselves a favor and skip this book, or at least the case studies, and go read de Soto's the Mystery of Capital.
Two of the four chapters in part 4 are EXCELLENT. The case studies, however, are uninformative. They tend to be 20 page descriptions of how a country's economic freedom score(s) is correlated with growth. There is ZERO explanation specific to that country for why that growth is caused by economic freedom. Instead they give specific history/background for the country, and then repeat the theory from the first part of the book to explain why they think economic freedom may be the reason for observed growth/lack there of.
The chapters do, however, tend to have pretty good descriptions of why growth was not caused by other, non-institutional, factors. The problem is that a book entitled "Making Poor Nations Rich" promises a little more than "institutions that protect property rights coupled with deregulation must cause growth because we're essentially libertarians who have eliminated many (but not all) other possible explanation for growth (and explanations for development generally)." Not that I don't think open markets/economic freedom is a great thing. I'm just saying there's very little that's new in here, and even very little that's explanatory.
Do yourselves a favor and skip this book, or at least the case studies, and go read de Soto's the Mystery of Capital.
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September 1, 2020This book is a collection of essays on economic development, featuring case studies from developing economies and countries transitioning from socialism to capitalism.
The process of increasing standards of living is interesting to me because of its importance in improving the lives of citizens, and “Making Poor Nations Rich” provides insight on how societies can achieve this.
As for the accessibility of “Making Poor Nations Rich,” it is not written in too dense or technical language, but it is a collection of academic papers. I knew a bit about economics going into reading it, and there were some concepts I was unfamiliar with, but overall I would say the book is comprehensible to a layperson.
The book is divided into three sections, the first of which expresses the thesis: that the main determining factor in economic development is whether countries have institutions that encourage entrepreneurship. The four essays in this section explore what this means in more detail and provide evidence for it.
The chapter “Entrepreneurship: Productive, Unproductive, and Destructive” by William Baumol claims that entrepreneurial energy can be directed to socially beneficial ends, such as creating valuable goods, or negative ends, such as corruption, depending on the incentives society provides. To provide evidence of this thesis, Baumol examines historical attitudes towards entrepreneurship from the Roman Empire to the present.
The following section covers four “Failures in Entrepreneurial Development”: Africa, Latin America, Romania, and Sweden. The chapter on Africa showed how African governments have kept the region one of the least developed areas on earth through corruption and mismanagement.
The following section covers examples of "Reform and Success in Entrepreneurial Development”: China, India, Ireland, New Zealand, and Botswana. Compared to other chapters, the New Zealand essay was particularly lacking in concrete detail about the impact of economic change in the country. However, the chapters on Botswana and India provide many firsthand accounts that show in full color the impact of economic stagnation and of economic success.
Reading about Botswana was particularly interesting; though not an often-discussed country, Botswana stands out among Sub-Saharan Africa for achieving strong economic growth in the post-colonial era at the hands of a transparent, laissez-faire government. However, these policies did not continue, as Botswana succumbed to political difficulties and increased the size of its government, in a story that can be read as parallel to that of the United States after its founding.
Overall, “Making Poor Nations Rich,” though it is a somewhat academic text, is worth reading for the information it provides about economic development.
The process of increasing standards of living is interesting to me because of its importance in improving the lives of citizens, and “Making Poor Nations Rich” provides insight on how societies can achieve this.
As for the accessibility of “Making Poor Nations Rich,” it is not written in too dense or technical language, but it is a collection of academic papers. I knew a bit about economics going into reading it, and there were some concepts I was unfamiliar with, but overall I would say the book is comprehensible to a layperson.
The book is divided into three sections, the first of which expresses the thesis: that the main determining factor in economic development is whether countries have institutions that encourage entrepreneurship. The four essays in this section explore what this means in more detail and provide evidence for it.
The chapter “Entrepreneurship: Productive, Unproductive, and Destructive” by William Baumol claims that entrepreneurial energy can be directed to socially beneficial ends, such as creating valuable goods, or negative ends, such as corruption, depending on the incentives society provides. To provide evidence of this thesis, Baumol examines historical attitudes towards entrepreneurship from the Roman Empire to the present.
The following section covers four “Failures in Entrepreneurial Development”: Africa, Latin America, Romania, and Sweden. The chapter on Africa showed how African governments have kept the region one of the least developed areas on earth through corruption and mismanagement.
The following section covers examples of "Reform and Success in Entrepreneurial Development”: China, India, Ireland, New Zealand, and Botswana. Compared to other chapters, the New Zealand essay was particularly lacking in concrete detail about the impact of economic change in the country. However, the chapters on Botswana and India provide many firsthand accounts that show in full color the impact of economic stagnation and of economic success.
Reading about Botswana was particularly interesting; though not an often-discussed country, Botswana stands out among Sub-Saharan Africa for achieving strong economic growth in the post-colonial era at the hands of a transparent, laissez-faire government. However, these policies did not continue, as Botswana succumbed to political difficulties and increased the size of its government, in a story that can be read as parallel to that of the United States after its founding.
Overall, “Making Poor Nations Rich,” though it is a somewhat academic text, is worth reading for the information it provides about economic development.
March 14, 2008
Here's the shorter version of each of these essays:
Give money to the folks in the Third World will become national capitalists and all the problems will go away through smart investment, directed social development and improved financial systems.
Yep, throw money at the problem. That's always worked.
Give money to the folks in the Third World will become national capitalists and all the problems will go away through smart investment, directed social development and improved financial systems.
Yep, throw money at the problem. That's always worked.
Displaying 1 - 3 of 3 reviews