January 10, 2008

Preying Governments

In the 8th chapter of The Undercover Economist by Tim Harford, the discussion of why countries are poor is intriguing. The fact that some countries grow and prosper and some remain poor for decades is a puzzling concept, but a reality for many parts of the world. Throughout the chapter Harford refers to Cameroon a small country in Africa that has remained poor despite aid from foreign nations. The question is why? Many countries struggle with poverty, but are able to pull themselves out of the grips of poverty and experience economic prosperity. Harford suggests countries such as China, India, and South Korea are all examples of poor countries that are experiencing significant economic growth. These countries are prospering because they have been allowed to change and to embrace economic activities such as trade and entrepreneurial ventures. The Governments have allowed for and created an economically prosperous environment and therefore the countries are able to grow and become wealthy.

Cameroon and many other poverty stricken countries are not able to participate in the economic activities that would allow them to gain wealth. This is due almost entirely to their preditorial government. The governments in these poverty stricken countries do not allow their citizens to partake in economic ventures such as trade and business. These governments give no incentives for economic prosperity; in fact they give disincentives. Governments, such as the one mentioned in Cameroon, tax and plunder their citizens to the point that they feel obligated not to create and produce. They also create a system in which property rights and laws are not upheld by the government, in turn creating chaos and a lack of productivity. Some of the leaders of these countries will even allow financial aid from foreign countries in order to increase their personal bank accounts, and provide no aid for the people of the country. These countries are burdened by a predator government with no intention or obligation to protect and encourage wealth and productivity among its citizens; in effect creating everlasting poverty!

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