Economic Gangsters

The Poverty Puzzle

Since the mid-1900s, some nations have escaped the chains of poverty to achieve stunning economic growth. These include the Asian tigers of South Korea, Malaysia, Taiwan and China. Yet poverty dominates Africa and parts of Asia. Consider Kenya: After a bloody revolution in the 1960s, the African nation seemed poised for freedom and prosperity. It had as much potential for economic growth as South Korea or China. With its fertile soil and rich stores of resources, Kenya could have grown into an economic power. Yet the typical Kenyan remains mired in poverty.

Effective poverty-fighting programs might help three billion people who scrape by on less than $2 per day move out of starvation and illiteracy. Why does Kenya lag as South Korea flourishes? For decades, Kenya received international aid from charities and foreign powers. The idea behind this largesse was that, with a helping hand, Kenya could lift itself into sustainable prosperity. But that’s not what happened.

Some experts, such as Columbia University economist Jeffrey Sachs, insist that ending the “poverty trap” requires the US and other rich countries to give more to poor states. Funneling...