There’s a comfortable myth that circulates in wealthy countries: knowledge is power, and power translates to wealth. Study hard, learn your craft, become an expert in your field, and prosperity will follow. It’s a seductive narrative, one that feels both meritocratic and just. But travel beyond the borders of affluent nations, and this equation falls apart.In much of the world, you can be brilliant and broke. You can master complex subjects, speak multiple languages, understand intricate systems, and still struggle to afford basic necessities. The problem isn’t a lack of knowledge. The problem is that in poor countries, money itself is scarce, and the pathways to accessing it are narrow and tightly controlled.
When capital is limited, societies develop gatekeeping mechanisms. Formal qualifications become the first filter. A university degree, a professional certification, a stamped piece of paper from a recognized institution—these become non-negotiable entry requirements, not because they necessarily indicate competence, but because they’re efficient sorting tools in environments where opportunities are few and applicants are many. You might be self-taught and extraordinarily capable, but without the right credentials, you won’t even get a conversation.The second, often more powerful filter is connections. In economies where resources are scarce, who you know frequently matters more than what you know. This isn’t merely nepotism, though that exists. It’s a rational response to limited information and high stakes. When hiring mistakes are costly and formal institutions are weak, people rely on trusted networks. Recommendations from family, friends, or community members carry weight because they reduce uncertainty. The most knowledgeable candidate in the room might lose out to someone less skilled but better connected, simply because trust is more valuable than talent when resources are tight.
This creates a frustrating reality for talented individuals in developing economies. A software developer in Lagos might have skills comparable to one in San Francisco, but earning a fraction of the income. An engineer in Mumbai might understand their field as deeply as a counterpart in Munich, but face far fewer opportunities. The knowledge is there. The market for that knowledge, however, is constrained by the overall scarcity of money in the economy.
Wealthy countries can afford to be more meritocratic, at least in theory. When capital is abundant, businesses can take chances on unconventional candidates. They can hire based on portfolios rather than pedigrees. They can afford the occasional mistake. In poor countries, this luxury doesn’t exist. Every hiring decision, every business partnership, every investment carries higher risk because failure has harsher consequences.
The result is a system that feels deeply unfair to those trapped within it. You can educate yourself, develop expertise, and cultivate skills, yet find yourself locked out of economic opportunity because you lack the right stamp on your diploma or the right family name. Meanwhile, mediocre individuals with excellent credentials or powerful connections rise effortlessly.This isn’t to say knowledge is worthless in developing economies. It’s not. But it’s necessary without being sufficient. Knowledge might get you to the door, but qualifications and connections determine whether it opens. In a world where money is scarce, access to that scarce resource gets rationed through social and institutional filters that often have little to do with actual capability.
Understanding this reality is crucial for anyone trying to navigate economic development, whether as an individual seeking opportunity or as a policymaker trying to create it. The solution isn’t to abandon education or skill development. Rather, it’s to recognize that in scarcity environments, removing barriers to entry and expanding access to both formal credentials and professional networks matters just as much as knowledge acquisition itself. Until capital becomes less scarce, or until alternative pathways to accessing it emerge, the paradox persists: you can know everything and still have nothing.
