Some 200 years have passed since the publication of Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations launched the modern discipline of economics. Economics has travelled a long path since then, but a number of the questions with which Smith was concerned at the outset have remained with us and perhaps have gained increased urgency over time. It is thus not surprising that the latter half of the twentieth century has seen a renewed focus on the question that informs Smith’s original title: the determinants of the performance of economies (or nations) in the very long run.
The resurgence of interest in the determinants of economic growth through the vehicle of endogenous growth theory has brought with it new understanding of what underlies long term economic prosperity. In particular, the role of human capital as an important driver of technological change, and hence development, has emerged as a key factor.
The definition of what precisely we mean by poverty is controversial. Yet empirical evidence establishes firmly that both the gap between the richest and the poorest countries in the world has been widening (as measured in terms of per capita GDP) since 1960, and that since independence a number of the very poorest countries in the world have experienced negative growth in per capita GDP. Regardless of whether one is concerned with relative or absolute conceptions of poverty, therefore, it is difficult to argue that poverty has not become a problem of greater urgency.