Regions characterized by poverty, such as South Asia and Africa, have received particular attention with regard to the underinvestment predicted by Lucas.
[5] In many cases in Armenia, the Lucas paradox is confirmed․ Ineffective implementation of legal and legislative mechanisms, insufficient level of development of the financial sector, and ineffective allocation of high-quality human capital are possible reasons behind the low inflow of capital to Armenia.
[6] Although Lucas’ original hypothesis has widely been accepted as descriptive of the modern period in history, the paradox does not emerge as clearly before the 20th century.
Although not emphasized by Lucas himself, Williamson maintains that unimpeded labor migration is one way that capital flows to the citizens of developing nations.
[8] For instance, in the 17th and 18th century, England incentivized its citizens to move to the labor-scarce Americas, endorsing a system of indentured servitude to make overseas migration affordable.
[9] In these ways, early American economic development, both pre and post-revolution, provides a case study for the conditions under which the Lucas Paradox is reversed.