A good column by the great John Stossel:
Short answer, looking worldwide: they don’t have a rule of law and property rights so they can’t form businesses.
My comment: in the USA and other advanced nations, this is not a problem, and poverty is much more a result of personal dysfunction and incapacity rather than legal and economic structures. On the other hand, the regulatory burden on businesses has metastasized so much in recent decades that it discourages business formation (large businesses can afford to have a department that deals with regulations and taxation, but a startup often can’t) and thus hinders wealth creation, leaving the middle-class poorer.
Stossel concludes by worrying that we have forgotten what made us prosperous. More evidence of that comes from the news coverage of the tax deal currently being hammered out in Washington. Most of the liberals quoted use the telling phrase “tax cut for the rich” or “tax break for the rich”. This is so ridiculous it should not be tolerated in serious discourse for an instant; in fact, it is even more transparently ridiculous here than usual, because we are talking about an across-the-board extension of some tax cuts, where the liberals are insisting that higher-income taxpayers be singled out and excluded, and the failure to single them out for punishment is the “break” they are getting. Nothing could indicate more clearly the soak-the-rich attitude that wealth is undeserved and may be freely redistributed.
Underlying this attitude (which overreached so badly here that it backfired) is what I call the “liberal ratchet”. When taxes are raised, it is proportional to income or “progressively” taxing higher incomes at a higher rate, and no liberal calls this unfair. But when taxes are cut, suddenly the way they look at it is in terms of absolute dollars rather than percentage rates, and then it is obvious that the “rich” (which means those with high incomes, even though they might need to continue earning at that rate for 20 more years to actually be “rich” given their home and family expenses) benefit more which is “unfair”. (The word “unfair” is bad enough, but when I hear people talk about “social justice” or “economic justice” it is even worse.) The effect of this ratchet is to gradually increase over time the share of the national tax revenues paid by the top earners; unfortunately we have reached the tipping point where half the voters pay practically no income taxes; they combine in coalition with the very rich and with government employees (nowadays a depressingly large permanent liberal constituency) against the middle class and moderately well-off.