How Governments Affect The Wealth of Nations

I don't read Esquire, but I linked to this article, which has some interesting points about why some countries are rich while others are poor. More importantly, the author talks about how some countries with no natural resources, like Singapore, rapidly moved from poor to rich.

Money quote:

And yet while Sachs and Diamond offer good insight into certain aspects of poverty, they share something in common with Montesquieu and others who followed: They ignore incentives. People need incentives to invest and prosper; they need to know that if they work hard, they can make money and actually keep that money. And the key to ensuring those incentives is sound institutions — the rule of law and security and a governing system that offers opportunities to achieve and innovate. That's what determines the haves from the have-nots — not geography or weather or technology or disease or ethnicity.

Read more: http://www.esquire.com/features/best-and-brightest-2009/world-poverty-map-1209#ixzz0XVDXG2TW