While diminishing returns predict that poor countries should converge with rich ones, many remain trapped below a critical capital threshold where savings cannot overcome depreciation; escaping this poverty trap requires external assistance such as foreign aid, investment, or a major policy reform to break through the threshold.
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Why Poor Countries Get Stuck — The Poverty Trap #Shorts本站添加:
Why do poor countries grow faster than rich ones? Diminishing returns. Adding a road to a country with no roads transforms it. Adding the thousandth highway to a country that already has 999 barely matters. So, poor countries should catch up. That's the convergence prediction. But many never do. They get stuck below a critical threshold of capital, a poverty trap, where saving is too low to overcome depreciation. The escape needs external help. Foreign aid, foreign investment, or one massive policy pushed to break through.
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