Ghana and Thailand in 1962: How Two Countries Developed Differently

In the early sixties they were equal. How did they end up where we see them now?

In 1962, Ghana and Thailand had much in common. Both were newly independent or newly open. Both had natural resources. Both had clean slates. Both had a choice: which way?

Today Ghana is more complicated. Thailand too, but in different ways. Ghana struggles with corruption, brain drain, economic dependency. Thailand with political instability and a previously closed economy. Both are developing nations, but with different diagnoses.

The question that has occupied economists for decades is: how could that be? They started the same. They had no fundamentally different given. Why did their paths split?

The answers you get are quickly surrounded by cultural clichés. Ghana would be less entrepreneurial. Thailand would have better governance. Probably there is something to both. But the truth is rougher: it came down to who held power when the moment came.

In Ghana came powerholders who were primarily focused on self-enrichment. Not unique, not really worse than in Thailand. But in Ghana it happened when there were limited watchers. Colonial structures were not dismantled but appropriated. Power ran along the same fixed paths through.

Thailand made other choices. Not from altruism. But from long-term self-interest. Investments in education not as ideal, but because you cannot build an economy without a literate population. Infrastructure development not because it was beautiful, but because you cannot trade without it.

This is not a story of good and bad nations. This is a story of incentives, and who recognized them. Ghana had leaders who plundered short-term. Thailand had leaders who understood that you cannot plunder the system without breaking it, so you must build it.

Why do I say this in a blog about emotional intelligence? Because this pattern repeats everywhere. In companies, in families, in organizations. Those who take short-term gains without maintaining the relationship degrade their system. Those who say: I must keep the relationship intact so I can negotiate next week, those grow.

Ghana did not get corruption because Ghanaians are more corrupt. Thailand did not automatically get better governance because Thais are more virtuous. Ghana got the scenario where power had no watchers. Thailand got the scenario where power understood that unchecked power is unreliable.

This sounds depressing until you realize: systems can change. Ghana now is not condemned to Ghana of 1962. It only requires restructuring incentives. In nations, in companies, in yourself.

Sources: Daron Acemoglu & James A. Robinson, Why Nations Fail (2012); Deepak Lal, The Poverty of Development Economics (1983); economic history of Ghana and Thailand.