State Versus Personal Prosperity
“Our prosperity as a nation depends upon the personal financial prosperity of each of us as individuals.”- Foreword to The Richest Man in Babylon.
Using just this statement, it is very easy to explain and understand the reason why nations, particularly developing nations struggle to develop and prosper. Most governments look at the ‘bigger picture’: Do we have good infrastructure? Do we have enough exports? Do we have enough industry?
While this is also an approach towards development, it’s often either slow, stagnant or in other scenarios brings about backward development. For instance, this approach is what prompts governments to borrow funds, to fund development projects. At the end, as I have witnessed, the nation ends up with man-made resources that are underutilised. e.g. Big airports that few citizens find useful, and incredibly huge debts, some payable for a period of over a century.
If this is not backward development, it’s too slow and unsustainable.
If governments wanted to accelerate their development, a better approach would be to look at the people, create a persona of their citizens, preferably the most disadvantaged citizen and see how factors can be moved to ensure the citizen is at an optimum state for self development. This can be done by grouping the citizens according to location, economic position and need, then assessing the conditions. Take the city dweller, look at his lifestyle, access to good health care, clean water, good education, security, ease of starting and excelling in a business, chances of innovation, probability of getting rich, level of human capital and so on. Then do the same for rural dwellers, marginalised people and even children.
The aim here should be to improve the personal welfare and increase chances of personal prosperity of each individual citizen.
While in some situations this approach may collide with the other approach of heavy investment projects, it is still better and sustainable; it is not blind – the goal is known and can be directly measured even with feedback. It brings the government closer to the people, it reduces heavy investment projects and so on.
As you will notice, in most cases, the government will just need to change and adjust policies, give incentives and act on some other areas that require little or no capital to improve the chances of prosperity of citizens.