Reading Poor Economics

I’ve been reading Poor Economics, which I highly recommend.

One of the authors’ central questions was “do ‘poverty traps’ exist? When and where?” A poverty trap works as follows:

In general, they seem to find that these investment opportunities exist in principle, but people don’t take them for a combination of a few reasons:

When put like this it’s not exactly surprising that people fail to make productive investments; it’s a problem in developed countries too! (Well, the “low trust” thing not as much, I suppose.)


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