MacroSnaps8 September 2026
No. 59In 1960 South Korea was poorer than Ghana. It is now richer than Japan.
GDP per person at 2017 purchasing power parity. Ghana in 1960 was a middle-income exporter of cocoa and gold; Korea had just come out of a war that flattened it.
Why this is happening
- Korea exported its way up. Firms were given cheap credit, protection at home and one condition: sell abroad and hit the target, or lose the credit. Competing against foreign buyers forced quality up in a way a protected domestic market never does.
- It invested in people first and machines second. Korea got to near-universal secondary schooling before it was rich, so when the factories arrived there were people who could run them, and now more than two thirds of young Koreans go to university.
- Ghana did roughly the opposite for 30 years: it taxed its cocoa farmers hard through a state marketing board, propped up an overvalued currency, and lived through a series of coups. Output per person in 1983 was lower than at independence.
The take
Nothing about being poor in 1960 predicted being poor in 2024. That is genuinely new: for most of history rank barely changed. It also means the standard explanations for national wealth, geography, culture, natural resources, cannot be the main story, because none of them changed in Korea. Policy did.