In psychology, there is something called the Dunning-Kruger effect. This is the phenomenon in which the stupid (or "unskilled", as they are referred to in the literature) make bad decisions, but are too incompetent to recognize their mistakes. This means that they consistently overrate their abilities (they rate them as above average), despite abundant evidence to the contrary. It also means that they cannot improve, because they are unable to learn from their errors.
Intelligent (or "highly skilled") people, on the other hand, clearly perceive their own abilities and defects, to the point that actual competence can weaken self-confidence. (Research on this topic has focused mostly on Americans, however, and may not hold for other cultural groups.)
To me, this explains a great deal about the world.