|Source: The Independent Institute-|
Lets say you have a country that has a decent amount of land or even a large country physically like Libya or Somali. And even have a considerable amount of natural resources as at least in Libya's case, but you have a moderate size population or are even lightly populated like both Libya and Somalia. And you are third world country definitely in Somalia's case that couldn't even govern itself up until recently. So you have this country and you can do with at you please as a country and you have a population that wants to make this country work, but all you need is direction to make that happen. What should you do how should you build your country?
It starts with good governance, not Big Government or Small Government but Good Government. A responsible executive, legislature hopefully both elected by the people themselves and a responsible independent judiciary. Lets say you've already figured out your National Constitution and what the role of of government should be in your country, how the national government relates to the state, or provincial and local governments and what they should be doing. And you have a National Constitution that doesn't make the National Government, lets say Federal Government in Somalia's case a dictator or have most of the power. But with enough power to govern the country and deal with things like the currency and economy.
You need a National Government not to rule over the people and run their lives but to serve the people. And do the things that you need government to do that the private sector can't do as well or at all. And you need to lay those things out and you need public officials who are not in public office to get wealthy or to have power. But to serve their people, so you need a limit on public as well as private corruption.
Whatever natural resources you have and hopefully enough to work your way towards energy independence, you need to utilize those and develop energy industries in this country so your economy has a revenue stream to help power the economy, but also to help fund government in the country.
You need a infrastructure system to build the roads, buildings, schools, bridges, airports and so-forth. So the people can get around and have places to work.
You need an agriculture system so you can put people to work but also so you produce enough food for the country.
You need an education system so you are producing enough well-educated workers for all of these jobs you are going to create.
You need a tax and regulatory system not to run the economy or run people's lives, but so their are rules of the road. And to limit abuses in the system and so you can also fund your limited but good and respectful government's.
And lets say you establish good governance in the country, you are probably going to need since you are a third world country. And essentially starting from scratch, you are going to need foreign aid from the developed world at least in the short-term. As you are developing your economy to be able to pay your short-term bills, but also develop your country. Because you are not going to have enough resources on your own when you are just starting out.
And then you need private enterprise and people starting and running their own companies and creating jobs and so-forth.
When you are a poor country you simply need to accomplish a menu of things to allow your country to be able to develop. Or you'll always be a developing country worst just a piece of land where a lot of poor people live and aren't able to take care of themselves. With a government not capable of governing.
Tom Woods: Making Poor Countries Rich