Why are some nations poorer than others? That question has haunted economists for decades. In the 1980s and 90s, the prevailing thinking was that nations were poor because they lacked resources like good farmland or mineral reserves.
The belief that “geography is destiny” has long guided the aid-giving strategies of organizations like the IMF and the World Bank. But now some are challenging conventional wisdom and arguing that social and political institutions are the keys to a nation’s economic growth — and are more important than how much oil or coastline a country has.
On the eve of the G8 summit, we talk with Daron Acemoglu — an MIT economist who studies countries in Africa, Asia and the Caribbean, and wants to reform the way countries give foreign aid.
Daron Acemoglu, MIT economist recently named the top economist under 40 by the American Economic Association and author of forthcoming book, “Economic Origins of Dictatorship and Democracy.”