In “The Prosperity Paradox,” Harvard professor Clay Christensen and two co-authors seek to unravel why, despite decades of aid amounting to a cumulative $4.3 trillion, many poor nations remain impoverished. In terms of income per capita, at least 20 of these countries are worse off after the assistance.
Quick take: What wealthy countries are chronically doing is attacking only the outward signs of poverty — bad water, poor roads, disease. They should stop.
- We have heard the “aid is wasted” thesis before, and from almost anyone else’s pen, this one too could easily sound glib.
- But Christensen and his co-authors Efosa Ojomo and Karen Dillon argue that education, water wells, medical care and electricity only seem to attack poverty.
- What they fail to do is get at the root — the cause — of poverty, and so do not set in motion sustained economic prosperity.
Their answer to the paradox: Nurture local companies making basic products that innovatively satisfy an unserved need, and employ a lot of people. And keep doing it, going through local government and entrepreneurs themselves. The result can be a market that takes off, providing cash money in addition to access to gainful employment and upward social mobility. “It’s a process, not an event. It’s a process of becoming very prosperous,” Christensen tells Axios.
Christensen says the same concepts that informed his first book apply to poverty and prosperity.
Read more at Axios