Why are some countries rich and others poor? And to this question, only history can give us some guidance to the answer because past societies constitute thousands of natural experiments with known outcomes. According to many readings, the answer to the question involves both external and human factors. In Mancur Olson’s essay, “Big Bills Left on the Sidewalk: Why Some Nations are Rich, and Others Poor,” he focuses the reader’s attention to the remarkable variations in levels of productivity and income marked out by national boundaries. In fact, we realize that countries with higher income levels richer. When an immigrant from a poor country lands in a rich country, his/her earnings rise by a factor or more. But because the immigrant did not unbelievably obtain either more human capital, or presume radically different cultural or religious values, then the determining factors must lie in the institutional and policy differences between the two countries. In general, many economists believe that people are rational and will grasp opportunities for gains from innovation, allocating efficiencies, and contractual adjustments. However, Olson disagrees. Olson considers neoclassical variables such as technology, capital, the quantity and quality of labor, land and natural resources. And in each of these sections, he mentions that knowledge is widely available at low costs, human capital differences are insufficient, and land/labor ratios and diminishing returns do not appear explanatory. Which then leaves policies and institutions that explains the differences between the rich and the poor countries.

It is commonly said that by improving economic and social conditions a country can reach an appropriate standard of living for all people. In developing the country, the governments of poor countries put their utmost effort in enhancing their domestic conditions. However, some countries still need assistance to develop; they do not have enough natural resources, knowledge and funds to develop independently. Taking a look on the access to productive knowledge, Olson takes the third world countries into consideration as an example. Third world countries, such as South Korea, have been growing very rapidly from the adoption of modern technologies from the first world. According to Olson’s statistics, the costs of intangible technology were minuscule. In fact, the foreign owners of productive knowledge obtained less than a fiftieth of the gains from Korea’s rapid economic growth. In history, statistics have shown that the level of technology has increased more quickly in developing countries and quickest in low-income countries.