The twenty-five richest countries in the world have an average per capita wealth of $100,000 each year, while the poorest twenty average under $1000. What explains the extreme difference in wealth? Here are some interesting theories.
There are three very important factors that explain the huge difference between rich and poor countries: institutions, culture, and geography. Institutions in richer countries are often better and also less corrupt, as opposed to impoverished nations that don’t have set tax systems. Studies also show that poorer countries are more dependent on religion, since it is based on the belief that the present cannot be improved, while richer countries believe that they can shape their own destiny. Not surprisingly, the United States is the only exception to this factor. Geography also plays a significant role, since hotter countries produce poorer agriculture and more rampant diseases, and those that are further from bodies of water usually suffer financially. Additionally, those areas that are rich in resources such as oil are more prone to corruption, since the richer countries are frequently after these resources, and the host country cannot afford the proper methods of extracting them. Understanding the roles that each of these factors play can educate everyone on how to better aid those countries in need.