But persistence is not just due to self-interest. Among the politicians and officials many are people of integrity, and sometimes against the odds they gain the upper hand. These are the moments of reform. But economic reform is not just a matter of political will. It is also a technical matter, and in the bottom billion there is a chronic shortage of people with the requisite knowledge. Few citizens get the training needed, and those who do get it leave. All too often, brave reformers get overwhelmed by the forces pitted against them before they can see a strategy through to completion.
Note: Key
In the 1960s and 1970s the rich world dominated global manufacturing despite having wages that were around forty times as high as those in the developing world. Why did this massive wage gap not make developing countries competitive? Part of the answer is that the rich world imposed trade restrictions on the poor world. Another part of the answer is that the poor world shot itself in the foot with its own trade restrictions, which made exporting into a competitive world market unprofitable.
Note: What a great question
Note: What are you suggesting? Wages that are 100 times lower?
only a country can get over the threshold, it enjoys virtually infinite possibilities of expansion: if the first firm is profitable, so are its imitators. This expansion creates jobs, especially for youth. Admittedly, the jobs are far from wonderful, but they are an improvement on the drudgery and boredom of a small farm, or of hanging around on a street corner trying to sell cigarettes.
Note: But then who is going to feed the population if not small farms?
The most depressing reaction is for people to see the society as intrinsically flawed. Their prolonged period of economic failure in Africa and the other countries of the bottom billion has deeply eroded the self-confidence of their societies.
Note: KEY