A Life Lesson from Poor Countries

I always like to extract life lessons from seemingly unrelated ideas. This time I want to discuss an interesting article titled Why Poor Countries Are Poor. The article, which talks about the reasons some countries are poor, takes Cameroon as an example:

The average Cameroonian is eight times poorer than the average citizen of the world and almost 50 times poorer than the typical American. And Cameroon is getting poorer.

To grasp the situation better, look at the infrastructure there:

Douala, a city of 2 million people, has no real roads… Piles of rubble and vast holes mark unfinished construction or demolition work. Along the middle is a strip of potholes that 20 years ago was a road… As our car slowly bumped and lurched through the crowds, I tried to make sense of it all by asking Sam, the driver, about the country. “Sam, how long was it since the roads were last fixed?” “The roads, they have not been fixed for 19 years.”

19 years? How could that happen? Remember, Douala is a major city. Didn’t the people complain about it?

The Main Reason Poor Countries Are Poor

Economists have theories about what make a country poor:

Economists used to think wealth came from a combination of man-made resources (roads, factories, telephone systems), human resources (hard work and education), and technological resources (technical know-how, or simply high-tech machinery).

But the author argues that the picture is incomplete. There is an important part missing. The missing part explains why a poor country couldn’t build those necessary resources in the first place. Here it is:

Government banditry, widespread waste, and oppressive regulations are all elements in that missing piece of the puzzle… During the last 10 years or so, economists working on development issues have converged on the mantra that “institutions matter.”

Having bad institutions is the main reason poor countries are poor. How do you know whether or not a country has bad institutions? There’s a clear characteristic:

…self-interested and ambitious people are in positions of power, great and small, all over the world. In many places, they are restrained by the law, the press, and democratic opposition. Cameroon’s tragedy is that there is nothing to hold self-interest in check.

That’s it. There’s nothing to hold self-interest in check. As a result, everyone just looks for ways to benefit himself without ever thinking about what the consequences might be for other people or future generations. There’s no mechanism to restrain short-sighted behavior.

A Life Lesson for Individuals

I know that an individual is much less complex than a country, but I do see a parallel here. To succeed, especially in this era of globalization, you need to have good resources. Having good infrastructure, knowledge and technology is tremendously helpful. But, above all, what you need to be successful is good “institutions.” It’s good “institutions” that enable you to use your resources effectively and even build them in the first place. Without them, your self-interest will rule:

  1. You will only do things that give you short-term benefits.
  2. You won’t do the painful things necessary for long-term good.
  3. You might cheat to get something for yourself at the expense of other people’s interest.

Good “institutions” help you prevent this short-sighted behavior.

The question is: what constitute good “institutions” at individual level? What are the things that hold self-interest in check? The answer, in my opinion, is your values and self-discipline. These are the foundation upon which you can build many other things necessary for success. They help you develop your potential and use your resources in the best possible way.

Let’s look closer at both of them:

  1. Self-discipline. Self-discipline pushes you to do things that are painful in the short-term but good for you and other people in the long-term. Self-discipline makes you do the deliberate practice necessary to master a skill. Self-discipline makes you do your work even if you don’t feel like to.
  2. Values. Your values fuel your self-discipline. They ensure that you have the internal motivation to do the right things rather than external motivation (like fear of punishment). They ensure that you can stay disciplined in the long run. Furthermore, they keep you from doing things that are harmful to other people or future generations.

Though they are different, the core of what makes a country successful is also what makes you successful. You need something that holds short-sighted behavior in check. You need something that makes you do painful things today for the sake of long-term good. You need to have strong values and self-discipline.

Photo by DraconianRain

11 Comments

  1. Insightful post. I’d add another to that list: helping others. Instead of always thinking for ourselves, why not do something to help someone else sometimes?

    Not only does this make the world a better place, but you’ll also find lots of times where people help you out without asking for anything in return, and sometimes you’ll receive an unexpected benefit.

  2. I totally agree with Ray…

    If we would start helping each other and keep asking: “What can I do for you?” the World would change…

    Greetings,
    Claus D Jensen

  3. Powerful article, Donald.
    Really thought provoking.
    I love how you tied compared a countries institutions with our personal ones.
    You really hit home the importance of living by our personal values… not only because it fulfills us… it fulfills the planet.

    Gonna tweet this one out.

    🙂 Susan

  4. Hi Donald,
    Amazing statistics! And great comparison between poor countries and our probably poor attitudes.
    Living in a Latin American country I can say that good institutions make the difference. And so do them for personal success. Self-discipline is specially what I find determinant for eliminating this short-sighted behavior.

  5. Ray and Claus,
    I agree with you. It will be great if everyone has that kind of attitude.

    Susan,
    Thanks 🙂

    Isaac,
    I can also say that good institutions do make the difference in a country. In recent years there’s been a lot of progress in the country where I live.

  6. Hm. Very insightful and unique definition of self-discipline. That’s where Capitalism and Communism/Marxism share the same folly–neither accounts for human greed (i.e. lack of self-discipline), so both fall prey to it. We tend to think we are truly Capitalistic in the U.S. but we aren’t–and that’s a good thing. (Labor laws, unions, anti-trust regulations, etc. All are uncapitalistic.)

  7. Great post. Great insights. I couldn’t agree more that the way we go about things in many ways determines the outcome. It really is all about the process…how we make decisions, how well we work with others, how much we consider other people’s welfare, and whether or not we uphold our values and aim to do what we know is right. When we are able to really maintain the integrity of the process, then we are guaranteed to have a better outcome. Very interesting post and a great comparison.

  8. […] Latumahina presents A Life Lesson from Poor Countries posted at Life […]

  9. Donald, thanks so much for this article. I loved what you said in the beginning of your article, that you like to look for ideas from seemingly unrelated sources: that is the crux of creativity and innovation, and something I strive for as well.

    I would agree that values and self discipline are key. For myself, connection to a Higher Power, which for me is God, is where I get my absolutes that inform my values. And apart from that relationship with God and accountability to other people (I have several people who hold me accountable to my values, but in a way that has my self-interest in mind, not in a tyrannical way:), it is difficult for me to keep self-interest in check.

    Of course, there is then enlightened self-interest, where we find out that giving of ourselves unselfishly is more rewarding than the seeming short-term benefits of self-interest.

  10. This is what I guessed the main problem to be even before it was posted! A few people, because they have access to power that others don’t, can maintain their own power and make things good for themselves, but that just destroys everyone around them. But, as noted, they do so at the expense of their country.

    I believe that the same thing is going on in America, however, since we have a wider net of riches, more people are able to be selfish and keep power, so that actually works against those in power because more people can keep it. Most people in America have to submit to rules made by powerful corporations, while the upper 1% or so keep making rules that benefit themselves. At some point, it will cause or country to crash and burn.

    Good article though, as I think its true, and the more we think of others, the better off our world is.

  11. Donald,

    The way you wrote your post make me think of Ayn Rand’s philosophy, of people looking out for their own best interests.

    I guess we really shouldn’t operate on 100% self interest…

    “I know that an individual is much less complex than a country, but I do see a parallel here.”

    Yes, it’s a huge parallel! Personally, I think individuals are just as complex as a country, if not more so. Some of the internal mechanisms that are working in human beings are so incredible, and complex. I think the microcosm (people) and the macrocosm (society system of a country) are very similar, and I never really looked at it that way before. This is an incredibly insightful post, Donald. This needs to be read by world leaders; maybe things will get better if they apply these values.

    Thank you,
    Josh Lipovetsky.

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