Clayton M Christensen - The Prosperity Paradox

I spent two years in the early 1970s serving as a Mormon missionary in South Korea, one of the poorest nations in Asia at the time. In South Korea, I witnessed firsthand the devastating effects of poverty: I lost friends to preventable illnesses and saw families routinely having to make impossible choices among putting food on the table, educating their children, or supporting the older generation. Suffering was part of daily life. I was so moved by that experience that when I received a Rhodes Scholarship to attend Oxford, I decided to study economic development, with a focus on South Korea. I hoped that might lead to a position at the World Bank, where I could try to help solve the problems I had seen in my time in South Korea. The particular year I wanted to join, however, the World Bank wasnt hiring any more Americans. That option was closed to me. So in the twists and turns of fate, I ended up at Harvard studying business instead. But the haunting images of the impoverished country stayed with me.

I am happy to say that when I visit South Korea today, it bears no resemblance to the South Korea I remember. In the decades since I lived there, South Korea has not only become one of the worlds richest countries but has also joined the respected ranks of the Organization for Economic Cooperation and Development (OECD) countries, and has gone from a foreign aid recipient to a foreign aid donor. I could not agree more. South Koreas transformation in just a few decades is nothing short of miraculous.

Unfortunately, such a dramatic transformation has not been possible for many other nations that resembled South Korea a few decades ago. By contrast, Burundi, Haiti, Niger, Guatemala, and many other countries that were desperately poor in the 1970s are still desperately poor. The questions that originally spurred my interest in helping South Korea years ago have continued to nag at me for decades. Why do some countries find their way to prosperity, while others languish in profound poverty?

Prosperity, it turns out, is a relatively recent phenomenon for most countries. Most wealthy nations have not always been prosperous. Consider, for example, the United States. We may forget just how far America has come. Not too long ago, America, too, was desperately poor, rife with corruption, and chaotically governed. By almost any measure, America in the 1850s was more impoverished than present-day Angola, Mongolia, or Sri Lanka.

For decades, we have studied how to stem poverty and create economic growth in poor countries, and we have seen some real progress. For example, the rate of extreme poverty globally decreased from 35.3 percent in 1990 to an estimated 9.6 percent in 2015. Even for those who are not technically living in extreme poverty, survival is still very precarious.

Although it is true that we have certainly made some progress, there seems to be no consensus on how to eradicate poverty. The suggestions range from fixing dismal societal infrastructure (including education, health care, transportation, and so on) to improving institutions, to increasing foreign aid, to boosting foreign trade, and many others. But even those who disagree on the right solution would surely agree with the assessment that progress has been too slow.