The Prosperity Paradox

Clayton M. Christensen, the author of such business classics as The Innovator’s Dilemma and the New York Times bestseller How Will You Measure Your Life, and co-authors Efosa Ojomo and Karen Dillon reveal why so many investments in economic development fail to generate sustainable prosperity, and offers a groundbreaking solution for true and lasting change. Global poverty is one of the world’s most vexing problems. For decades, we’ve assumed smart, well-intentioned people will eventually be able to change the economic trajectory of poor countries. From education to healthcare, infrastructure to eradicating corruption, too many solutions rely on trial and error. Essentially, the plan is often to identify areas that need help, flood them with resources, and hope to see change over time. But hope is not an effective strategy. Clayton M. Christensen and his co-authors reveal a paradox at the heart of our approach to solving poverty. While noble, our current solutions are not producing consistent results, and in some cases, have exacerbated the problem. At least twenty countries that have received billions of dollars’ worth of aid are poorer now. Applying the rigorous and theory-driven analysis he is known for, Christensen suggests a better way. The right kind of innovation not only builds companies—but also builds countries. The Prosperity Paradox identifies the limits of common economic development models, which tend to be top-down efforts, and offers a new framework for economic growth based on entrepreneurship and market-creating innovation. Christensen, Ojomo, and Dillon use successful examples from America’s own economic development, including Ford, Eastman Kodak, and Singer Sewing Machines, and shows how similar models have worked in other regions such as Japan, South Korea, Nigeria, Rwanda, India, Argentina, and Mexico. The ideas in this book will help companies desperate for real, long-term growth see actual, sustainable progress where they’ve failed before. But The Prosperity Paradox is more than a business book; it is a call to action for anyone who wants a fresh take for making the world a better and more prosperous place.

This book presents compelling evidence of the 'wealth paradox', where economic prosperity can also fuel prejudice, social unrest, and intergroup hostility.

The Prosperity Paradox explains why farm worker problems often worsen as the agricultural sector shrinks and lays out options to help vulnerable workers.

Brilliant and engagingly written, Why Nations Fail answers the question that has stumped the experts for centuries: Why are some nations rich and others poor, divided by wealth and poverty, health and sickness, food and famine? Is it culture, the weather, geography? Perhaps ignorance of what the right policies are? Simply, no. None of these factors is either definitive or destiny. Otherwise, how to explain why Botswana has become one of the fastest growing countries in the world, while other African nations, such as Zimbabwe, the Congo, and Sierra Leone, are mired in poverty and violence? Daron Acemoglu and James Robinson conclusively show that it is man-made political and economic institutions that underlie economic success (or lack of it). Korea, to take just one of their fascinating examples, is a remarkably homogeneous nation, yet the people of North Korea are among the poorest on earth while their brothers and sisters in South Korea are among the richest. The south forged a society that created incentives, rewarded innovation, and allowed everyone to participate in economic opportunities. The economic success thus spurred was sustained because the government became accountable and responsive to citizens and the great mass of people. Sadly, the people of the north have endured decades of famine, political repression, and very different economic institutions—with no end in sight. The differences between the Koreas is due to the politics that created these completely different institutional trajectories. Based on fifteen years of original research Acemoglu and Robinson marshall extraordinary historical evidence from the Roman Empire, the Mayan city-states, medieval Venice, the Soviet Union, Latin America, England, Europe, the United States, and Africa to build a new theory of political economy with great relevance for the big questions of today, including: - China has built an authoritarian growth machine. Will it continue to grow at such high speed and overwhelm the West? - Are America’s best days behind it? Are we moving from a virtuous circle in which efforts by elites to aggrandize power are resisted to a vicious one that enriches and empowers a small minority? - What is the most effective way to help move billions of people from the rut of poverty to prosperity? More philanthropy from the wealthy nations of the West? Or learning the hard-won lessons of Acemoglu and Robinson’s breakthrough ideas on the interplay between inclusive political and economic institutions? Why Nations Fail will change the way you look at—and understand—the world.

A pioneering account of the surging global tide of market power—and how it stifles workers around the world In an era of technological progress and easy communication, it might seem reasonable to assume that the world’s working people have never had it so good. But wages are stagnant and prices are rising, so that everything from a bottle of beer to a prosthetic hip costs more. Economist Jan Eeckhout shows how this is due to a small number of companies exploiting an unbridled rise in market power—the ability to set prices higher than they could in a properly functioning competitive marketplace. Drawing on his own groundbreaking research and telling the stories of common workers throughout, he demonstrates how market power has suffocated the world of work, and how, without better mechanisms to ensure competition, it could lead to disastrous market corrections and political turmoil. The Profit Paradox describes how, over the past forty years, a handful of companies have reaped most of the rewards of technological advancements—acquiring rivals, securing huge profits, and creating brutally unequal outcomes for workers. Instead of passing on the benefits of better technologies to consumers through lower prices, these “superstar” companies leverage new technologies to charge even higher prices. The consequences are already immense, from unnecessarily high prices for virtually everything, to fewer startups that can compete, to rising inequality and stagnating wages for most workers, to severely limited social mobility. A provocative investigation into how market power hurts average working people, The Profit Paradox also offers concrete solutions for fixing the problem and restoring a healthy economy.

Health-Care Solutions from a Distant Shore Health care in the United States and other nations is on a collision course with patient needs and economic reality. For more than a decade, leading thinkers, including Michael Porter and Clayton Christensen, have argued passionately for value-based health-care reform: replacing delivery based on volume and fee-for-service with competition based on value, as measured by patient outcomes per dollar spent. Though still a pipe dream here in the United States, this kind of value-based competition is already a reality--in India. Facing a giant population of poor, underserved people and a severe shortage of skills and capacity, some resourceful private enterprises have found a way to deliver high-quality health care, at ultra-low prices, to all patients who need it. This book shows how the innovations developed by these Indian exemplars are already being practiced by some far-sighted US providers--reversing the typical flow of innovation in the world. Govindarajan and Ramamurti, experts in the phenomenon of reverse innovation, reveal four pathways being used by health-care organizations in the United States to apply Indian-style principles to attack the exorbitant costs, uneven quality, and incomplete access to health care. With rich stories and detailed accounts of medical professionals who are putting these ideas into practice, this book shows how value-based delivery can be made to work in the United States. This "bottom-up" change doesn't require a grand plan out of Washington, DC, agreement between entrenched political parties, or coordination among all players in the health-care system. It needs entrepreneurs with innovative ideas about delivering value to patients. Reverse innovation has worked in other industries. We need it now in health care.

Why has an economy that has done so many things right failed to grow fast? Under-Rewarded Efforts traces Mexico’s disappointing growth to flawed microeconomic policies that have suppressed productivity growth and nullified the expected benefits of the country’s reform efforts. Fast growth will not occur doing more of the same or focusing on issues that may be key bottlenecks to productivity growth elsewhere, but not in Mexico. It will only result from inclusive institutions that effectively protect workers against risks, redistribute towards those in need, and simultaneously align entrepreneurs’ and workers’ incentives to raise productivity.

First edition. In The Paradox of Prosperity, Laura Cruz explores the world of the book trades as it was constructed in Leiden in the decades after the Revolt against Spanish rule. She traces the migration of printers from the Southern Netherlands to Leiden and observes how they congregated within the city and sought contracts with the city's new university. But this is only the beginning of a multifaceted analysis of the development of a market-driven industry that eventually is organized under the protective umbrella of a guild. And this guild, in turn, is something other than the traditional guilds of medieval origins. Rather than a bulwark against market forces, the guild of the printers was an instrument to exercise market power. This book offers a fresh look at the role of an institution that is often dismissed, even in the early modern period, as a relic of an earlier time.Leiden's book trade was unique, exhibiting a specific quality that calls for a specific explanation. Laura Cruz addresses this historical specificity, but goes a step further. Leiden publishing emerged as an industry with a European scope and with national and international competitors. Distinguishing the particular from the general and the accidental or providential from the systematic forces at play within early modern European society is an historian's duty, but one that is often neglected. Savoring the particular is often thought to be enough, indeed, to be the only real purpose of history. Laura Cruz goes further, harnessing her rich historical material to the methods of economic and social history. From this vantage point, she addresses questions that give new insights to the culture of the young Republic that are based not only on the thoughts and dreams of individuals, but also on the behavior and aspirations of groups and the constraints and opportunities presented by institutions.