Why Institutions Matter More Than Resources

Two nations can sit on comparable natural wealth and arrive at opposite destinies. The difference is rarely the resource; it is the rules. Where institutions reward enterprise, protect contracts, and restrain the powerful, ordinary effort compounds into prosperity. Where they do not, even abundance leaks away.

Three institutional habits of growing economies

• Predictable rules that outlast individual office-holders
• Accountability mechanisms that catch failure early and cheaply
• Open channels through which new people and ideas can enter

For reformers, the lesson is sobering and hopeful at once: you cannot drill your way to development, but you can govern your way there. Resources deplete; sound institutions appreciate.