Wednesday, May 8, 2019

The Prosperity Paradox : How Innovation Can Lift Nations Out of Poverty 2019

Although Christensen and his colleagues wrote this book targeting developing countries, the last chapter on infrastructure has lessons for everyone. Entitled "If You Build It, They May Not Come", the chapter divides infrastructure into these seven categories: schools, financial systems, ports, electricity, sewer systems, roads and bridges, and water works. The first two, the authors considered soft infrastructure, and the rest hard. Some of these store or distribute natural resources, other do both. From this reality, the authors define infrastructure as, "the most efficient mechanism through which a society stores or distributes value" (p. 243). Given this definition, the infrastructure, schools, does not necessarily deliver the value, education. We see this truth not only in poor countries, but within the educational system in the U. S. This rule of value applies not only to education, but to the other forms of infrastructure. Many countries have stories of bridges or roads to nowhere or disruptive dams.

For the above reasons, Christensen and his colleagues take a market view of infrastructure development rather than relying on a central government:

"It would be easier to rely on governments to take the lead and remove that worry and responsibility from private enterprise. But history tells us that that doesn't often happen.
When you create a new market, the profits from the market help pay for the infrastructures pulled into the economy. This is how many major infrastructure projects in the United States were developed. By themselves, many of the infrastructures--the roads, the rails, the canals, and so on--were not profitable. But once the infrastructures were pulled into an American economy that was creating a lot of value that needed to be stored or transported, the infrastructures then became viable" (pp. 252-253).

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