A large investment in education and human capital by itself does not produce development or democracy, because human capital is an input that requires complementary institutions—secure property rights and the opportunity to use one's skills productively; without those, human capital is worthless, paralleling the foreign-aid literature's repeated failures (savings gap, then human capital gap) ultimately explained by incentive and information problems.
causalpending
Speaker
Christopher CoyneEvidence Quote
“the countries that receive aid don't have the incentive to use it correctly ... there's no feedback mechanism ... no prices or profit loss mechanism that allows them to know they're doing the right thing”
Created: 6/15/2026, 9:29:02 AM
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