This book addresses the subject of global poverty, arguing that that the root problem lies in political and social discrimination hindering entrepreneurship. It draws on studies of China and Vietnam for good case practices, where the poor are able to seize business opportunities and drive wealth creation.
Key findings:
- The poor are poor because they are excluded, deliberately or not, from opportunities such as going to school, getting funding to grow their businesses and getting a fair hearing in a court of law.
- The Chinese have been able to create economic success due to two key ingredients for robust economic growth: First, they live in a country whose people are linked together through extensive social networks and who share a common identity. Thus, there are few societal barriers preventing the great majority of people from seeking their fortune on a relatively level playing field. Second, their government finally adopted a set of policies to capitalize on China’s enormous pool of human and social capital—an emphasis on inclusive, export-led growth and on investing in infrastructure and education.
- Growth must be the starting point for efforts to develop a country’s infrastructure, increase incomes and reduce poverty. Most developing countries’ economies are expanding more slowly than they could and should. Diversifying and expanding the sources of economic growth in a way that increases productivity while expanding opportunity requires both greater success in manufacturing and a more dynamic rural sector.
- Growth must be inclusive to benefit the poor. Some growth trajectories, such as ones found in Nigeria and Angola, can increase poverty. Governments must create dynamic, job-producing economies and invest in education, health and job preparedness.
- The importance of political development is illustrated by the crucial role that long-standing institutions have played in the economic success stories of many countries, especially in East Asia. China, Vietnam and Korea have been able to leverage the public governance knowledge, systems, and cultures built up over millennia to advance development. While promoting good governance and economic development is a high priority for donors, few make the promotion of political development an explicit policy objective, despite its importance.
