Poor Nations, Rich Nations: A Theory of Governance

Abstract This article argues that the difference between poor countries and rich countries has to do with governance rather than resources. In emphasizing the importance of public administration in explaining economic success and failure, the author examines three general theories of governance (organizational, cultural, and structural‐functional) presented in Ferrel Heady's textbook in comparative administration. Political elasticity theory is introduced as a way to reconcile and overcome the weaknesses of these theories and to explain a number of unresolved questions in the literature having to do with decentralization, corruption, democracy, culture, and globalization, using comparative case studies (the Netherlands and Ghana, Singapore and Jamaica, and Japan and Nigeria). The implications of political elasticity theory for foreign aid are suggested at the conclusion, illustrated by a comparison of Spain and Mexico. What ties these case studies together is the heretofore unnoticed and/or unexplained fact that as countries prosper, political power takes on “rubber‐band” and “balloon” characteristics.