Money is not capital in most of the developing countries. It's just cash. Because it lacks the institutional, organizational, managerial forms to turn it into capital.
Interpretation
In developing countries, money often does not function as capital due to a lack of necessary structures for investment and growth.
Ashraf Ghani's quote emphasizes that in many developing nations, what is commonly referred to as money does not serve the purpose of capital because the essential systems and structures, such as institutions and management, required to leverage money for economic growth are absent. This distinction highlights a critical barrier to development, as without the ability to convert money into productive capital, economic advancement is severely limited.
In practice
During an economic conference discussing the challenges of growth in developing nations.
Economics taught in most of the elite universities are practically useless in my context. My country is dominated by drug economy and a mafia. Textbook economics does not work in my context, and I have very few recommendations from anybody as to how to put together a legal economy.
It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only those individuals know.
Regulation has gone astray. . . . Either because they have become captives of regulated industries or captains of outmoded administrative agencies, regulators all too often encourage or approve unreasonably high prices, inadequate service, and anticompetitive behavior. The cost of this regulation is always passed on to the consumer. And that cost is astronomical.
When the economic well-being of their nation demanded a strong and creative response, my colleagues at the Federal Reserve... mustered the moral courage to do what was necessary.
Perhaps the hardest challenge has been to persuade the public, impatient for rapid growth, of the need to ensure stability first. Growth, it is argued, is always more important, regardless of the looming economic risks.
Bankruptcy exposes the economic vulnerability and insecurity of middle class women.
In America, people with lots of money can easily avoid the consequences of bad bets and big losses by cashing out at the first sign of trouble.
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