What makes my experience a little more representative (or so my ego says) is the fact that I am from Eastern Europe. Ever since several years now (3-4) we are no longer that attractive IT outsourcing location because a lot of people around here learned their price and value and charge normal (if still below USA's) rates. And thus many businesses started trying to outsource cheaper to Africa and parts of Asia.
The results have been catastrophic and hilarious at the same time. I've been called to "fix the mess" 6-12 months later by five businesses now, and I outright told one of the business owners that he'll have to pay me $20k a month to fix something as non-salvageable as the dumpster fire I was given. He refused which was a win for me because I still value my time and sanity.
So many businesses look at this outsourcing to cheaper staff thing very superficially, as you said. Sure you save money the first 2-3 months. Absolutely, you do. But then all the unfinished and badly done work starts peeking from the edge of the window.
And finally, you are also very correct when saying that hiring the managers that govern these people efficiently effectively destroys the cost savings.
In conclusion: I have definitely observed the same as you.
(Several edits: apparently I had a stroke and wrote some really broken English here and there.)
Eastern Europe is not a great example of productivity either.
I can totally understand why employees from poorer countries disappear all the time - why wouldn't they? They know they're getting paid peanuts in your country (so you don't expect much) and you're paying them an incredibly competitive salary in their own country (which means their lifestyle is closer to upper middle class).
Which means they can piggy-back off your seemingly efficient decisions and get away with doing less.
You should know there's a lot of world-class talent around here. Sure there's tons of slackers but I posit that's true everywhere (maybe they can't squeeze through the cracks in the USA? but they still exist).
I really hope that in the near future at least some African countries could be in a position to move up the value chain and take control of their own destiny as well.
> Garett Jones (2013) builds upon Kremer's O-ring theory [...] He then goes on to show that small international variations in average worker skill per country result in both large international and small intra-national income inequality.
This sums up the situation to me. The value of the skilled worker depends on the value (and desired quality) of what is being produced with co-workers. So in theory if you could build up a distributed team of these skilled lower-salaried workers, have them work well remotely with each other, have a high sense of quality and share other relevant cultural norms, then high-quality/value products could be produced for such a market demand.
No matter how much you try the only way to fix that is to equalize their opportunities, but you would never do that because you're inherently interested in keeping them poor.
Things do change.
sounds like specifically a work ethic problem, which is indeed an issue outside the US , Western europe, japan etc, assuming those programmers were indeed capable enough and getting paid above-decently. I don't know how you go about building work ethic in countries that don't have it
It reminded me of Gregory Clark's 1987 paper "Why Isn't the Whole World Developed? Lessons from the Cotton Mills" https://pdfs.semanticscholar.org/6152/0798b9dd2c691872d58db3... where he points out that despite Indian labor being incredibly cheap, Indian cotton mills were still uncompetitive with British (and later, Japanese) cotton mills for basically the same reasons. As the saying goes, "you get what you pay for"... The more something is an o-ring process https://en.wikipedia.org/wiki/O-ring_theory_of_economic_deve... , the more skimping on labor is penny-wise pound-foolish.