Governments and Health in the Third World

“Curmudge, do you recall our imaginary visit a few weeks ago to that Third World village where the people had such poor health and sanitation? I suspect that those people’s sorry situation is duplicated in many locations throughout the Third World. What’s the root cause of their plight?”

“In my opinion, Jaded Julie, the root cause is poor government. I’ve heard it said that in the U.S. one gets rich and then goes into politics; in the Third World one goes into politics and then gets rich. In these countries, graft is rampant. When the developed world sends (lends?) money to Third World countries, it often ends up in the pockets of the leaders and their cronies. These folks don’t seem to believe that a government should exist for the benefit of its people.”

“Citizens of Third World countries often do quite well if they are able to emigrate to a developed country. What is their country of origin lacking that prevents their ‘pulling themselves up by their bootstraps’ back home?”

“For the most part, the countries of the world that are the most poverty ridden are those without democratic governments that foster free markets. This is documented by studies published by the World Bank. At the bottom of the ease-of-business scale are those little countries of Africa that would be difficult to find even on an up-to-date map. The vast majority of the populations of these same countries live in poverty.”

“That must mean, Curmudge, that the countries in which the citizens prosper are those in which it is easy to do business.”

“Exactly. At the top of the ease-of-doing-business scale are Singapore, New Zealand, Hong Kong, and the U.S. in that order. The World Bank’s criteria include: starting a business, dealing with licenses, hiring and firing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, and closing a business. We know intuitively that most of these conditions are favorable in the countries of the developed world.”

“I saw you reading an article by Steve Forbes in which he elaborated on some of these criteria.”

“According to Forbes, the rule of law that we enjoy in the U.S. is essential. Commercial contracts must be respected by everyone, including government bureaucrats, and government cannot seize your property or nationalize your business. ‘Low tax rates on income, profits and capital gains foster more risk-taking and higher growth, bringing about a richer economy with a higher standard of living—along with higher government revenues.’”

“Curmudge, some people don’t believe what Forbes said about lower tax rates bringing a higher standard of living and, at the same time, higher government revenues.”

“Forbes’ statement is undoubtedly based on the Laffer curve. Although it is somewhat controversial, the political philosophy of those who totally reject it appears to have blinded them to the realities of history. Speaking of history, the concept of the Laffer curve has been around since the 14th century.”

“So back to those impoverished folks in the Third World village we visited a few weeks ago. We could help that single village by sending our own resources, but what can be done to assist the whole poverty-ridden nation?”

“If the source of poverty is despotic leadership, Julie, one solution might be regime change. The feasibility of that depends on the relative strength and determination of the regime and of the people. Peaceful change came to the former Soviet–bloc countries in 1989-90 because virtually all of the citizens participated in peaceful demonstrations that the communist leaders were unwilling to suppress violently. Elsewhere, regime change has not occurred because despotic leaders were willing to put down unrest irrespective of the cost.”

“I have the feeling that today’s discussion might end on a discouraging word, Curmudge. If they don’t get a democratic, somewhat benevolent government, the folks we visited may have to put up with their polluted water and hanging toilet for a long time.”

“They are not the only people with concerns, Julie. Even people in developed countries have to work hard to keep their standard of living from being eroded by their government. To quote Thomas Paine, ‘The greatest tyrannies are always perpetrated in the name of the noblest causes.’"