Yes, differences in capital endowment explain only a tiny fraction of GDP per capita differences. We can also look at things like development aid having pretty much zero correlation with economic growth for poor countries.
We also observe that access to natural resources tends to have a negative impact on growth in developing countries.
What we do know is that institutions matter a lot. Countries that embraced capitalism, like South Korea or West Germany saw tremendous growth and became essentially Western countries while those that chose paths closer to your preferred system, like East Germany or North Korea remained in abject poverty.
Note that among people who study these things the above facts are fairly elementary. And taken together they strongly indicate that just dumping a pile of money into some African dictatorship would do basically nothing to improve the situation for the people of that country.
The issue here is that you're presenting these "fairly elementary" facts as if it is commonly agreed upon that development aid has little effect on both human and economic development. That's an incredibly contentious claim. There is no consensus among development economists on this question. It's the equivalent to stating that "it's a consensus among politicians that abortion should be a personal choice". No, there are loads of prominent development economists who are avid proponents of increasing foreign aid flows, whether it's through a model that's more focused on industrial development or whether it's through the standard "human development" model that's rooted in Sen's reframing of the ends of development economics.
This is preposterous stuff Gustaf. I don't agree with MOP but there's no need to make stuff up to refute his claims. You could actually be nuanced instead of a sneering/pompous dick. I'm assuming that you will write a very good response to my post that is nuanced and that will reveal that, indeed, you are a trained academic economist but, that said, it would be nice if you used this knowledge to present an argument that wasn't facile and that didn't treat posters like they were children. In my view, this is a very major problem of the field: economists are prone to telling laymen and the public that economists, without question, believe that free trade is wonderful or that markets are fantastic without revealing the pesky facts and nuances that define the field and its structure. What makes economics so interesting is not "comparative advantage" or "the price system" but, rather, the particulars relating to these concepts: what is the magnitude of the gains of trade? What are the distributive effects of trade? When do prices misallocate resources? When do externalities come into existence?
If economists stop acting like they'd be opening pandora's box if they told the public that, actually, trade can have very underwhelming effects on growth, maybe we could have a more honest dialogue about trade in which the words of the profession weren't taken with a heap of salt. No one trusts what economists have to say because economists say things that are, as a point of fact, facetious.
