One of the most popular topics in my lectures, as evidenced by popular vote, is the root of national success — why are some countries more successful than others? I usually start by asking the audience to suggest some answers. Turns out that almost everybody has a homespun theory: “Japan is successful thanks to its culture” or “The US is successful because it is innovative”. But these theories, as compelling as they may sound, are usually limited.
It’s easy to explain something after it happens. But the ability to explain things before they happen — the ability to predict — is the mark of a good theory. Most explanations we hear are truisms: maybe good for explaining the present, but not the future. So what’s a good explanation of national success? A good theory would explain not only a country’s present success, but also predict if the good times will continue. A good theory would also do the opposite: predict which currently humble countries are set to rise.
In my lecture, we draw on the examples of Korea, Spain, and Argentina, relying on the research of Prof. Mauro Guillén and others. Argentina is a particularly powerful example. A century ago, it seemed destined for success: “Its economy had grown faster than America’s over the previous four decades. Its GDP per head was higher than Germany’s, France’s or Italy’s. It boasted wonderfully fertile agricultural land, a sunny climate, a new democracy”, as The Economist reminds us.
If we can understand what made Argentina grew and what stunted the country, we may be able to understand why some countries are more successful than others. We may also be able to predict which will be successful in the future. We may be able to take action today to make our country more successful for longer. The Economist details the facts. See if you can use them to craft a good explanation.