Rich countries barely invest in poor ones, and standard theory can't explain why

Textbook economics says capital should rush toward poor countries, where it's scarce and returns should be highest. In 1990, Robert Lucas pointed out that hardly any does — investment mostly flows between rich countries instead. He argued gaps in institutions, human capital and political risk, not just missing factories, explain why poor countries stay starved of capital.

— Robert E. Lucas Jr., Why Doesn't Capital Flow from Rich to Poor Countries? — American Economic Review, Papers and Proceedings, 1990