4 Ways Countries Fail to Grow Economically

From the outside, it can seem like a mystery why certain countries are poor and others are not. However, there are tangible reasons why certain countries remain poor. There are also tangible solutions. This is what Jeffrey Sachs in his book The End of Poverty: Economic Possibilities of Our Time explains. Sachs identifies eight reasons why countries fail to have economic growth. I have included four of the reasons from his list here and offered my own explanations of his ideas. The next four will be included in tomorrow’s post.


1. “The Poverty Trap: Poverty Itself as a Cause of Economic Stagnation”

There is a cycle to poverty: People who are poor lack the “savings” and “capital—
physical, human, and natural”—to overcome poverty. The idea is that poverty itself leaves people in the same circumstances despite their efforts to change them. As much as people may try, there is a barrier in place to becoming wealthy, and that barrier is poverty and its implications upon their daily lives.

The poverty cycle and a solution to it is explained in this infographic.


2. “Physical Geography”

If the country you live in is full of mountains or deserts, it’s very difficult for proper infrastructure to be created. It’s also problematic to transport goods. This prevents most types of companies from existing.


3. “Fiscal Trap”

When a government doesn’t have the necessary resources to create infrastructure, economies struggle to grow. This is the case for many impoverished countries. The physical geography problems, and often the simple infrastructure problems, cannot be overcome because of a lack of financing. This keeps the economy stagnant.


4. “Governance Failures”

An ineffective government can ruin any economy. This is certainly the case for many governments around the globe, and seems to be especially true in the developing world. There is little the average person can do about this. But there is something.

Jesus’ Economy offers leadership training, accompanied by biblical ethics training, to help overcome some of the barriers of corruption that run through many societies in the developing world. (Corruption in many developing world societies became widespread because it was the only way people knew to survive.) When a group of people begins to live by a higher standard of ethics, others may soon follow. This can produce moral change around the board.

People who live in poverty are not any different than you and me. They just need help overcoming the barriers in their way. Jesus’ Economy offers solutions to many of these problems. Donate today to holistic regional transformation.

(This is part one of two of "Ways Countries Fail to Grow Economically." It's a sub-series of the blog series "What I Learned from Jeffrey Sachs.")

John Barry
John Barry


CEO and Founder of Jesus' Economy. John is the General Editor of the highly acclaimed Faithlife Study Bible and Lexham Bible Dictionary. His new book is Jesus' Economy: A Biblical View of Poverty, the Currency of Love, and a Pattern for Lasting Change. It is widely endorsed by Christian leaders from around the world.