Chapter 13

The efficiency and stability of a nation's government can have a huge effect on the health of it's economy. Through corruption, ineffective institutions, a lack of property rights, and excessive regulations governments can harm their nations' economies and keep the poor from improving their positions. The poorest countries suffer from unstable and ineffective governments. Wheelan writes that famines are caused more by "faulty political systems" which increase the effects of minor agricultural problems. The logical solution for poverty stricken countries would be to start with a stable political system with effective institutions and develop the country from there, but that is easier said than done. So many elements of a developed country and healthy economy are connected that it is difficult to start. Wheelan uses the example that "building effective government institutions is easier when the population is literate and educated, yet decent public education requires effective government institutions." Poverty is a complex problem to solve, but those of us in the developed world could be doing a lot more to effectively work towards a better world.