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Big Bills Left on the Sidewalk: Why Some Nations Are Rich and Others are Poor
Chapter in a book, Working paper, Research brief
Mancur Olson
March 1996 |
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An assistant professor is walking along with a full professor when he sees a $100 bill lying on the sidewalk. As he bends to pick it up, his senior colleague restrains him, pointing out that if the bill were real it would have already been picked up.
This classic article by Mancur Olson discusses theories about the efficiency of markets, and how the differences between poor and rich countries test those theories. Economists tend to believe that rational behavior leads to societies achieving their productive potential. If this is so, the fact that there are extremely poor countries and extremely rich countries, often in close proximity to one another, can only be explained in two ways: either some countries simply have lower potential, or some countries’ policies and institutions are better suited for maximizing existing potential. |
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| Last updated on: 3/23/2006 |
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