This summary and review of the book, Why Nations Fail: The Origins of Power, Prosperity, and Poverty, was prepared by Irma L. Zambrano while a Management major student in the College of Business at Southeastern Louisiana University in Hammond, Louisiana.
“Why Nations Fail” by Daron Acemoglu and James Robinson analyzes, from the end of the ice age to the present day, why there are communities and countries that manage to create welfare for its members and others not. Geographical explanations of abundance or scarcity of resources, the cultural are refuted with hard evidence to controvert. The thesis: prosperity and poverty are determined by the incentives created by institutions; politics determine the institutions.
The main thesis of the book is that the future of nations depends on how people organize their societies. It also shows that while financial institutions are essential, policies are more decisive. The book explains the difference in prosperity of countries by one key factor: the quality of its institutions and they are neither culture nor geography, nor religion.
In this sense, the book concludes that nations fail because their institutions are weak and “extractive”, meaning that they are mutually exclusive: a privilege society groups over others and concentrate power in an elite acting for their own benefit.
According to the authors, these structures do not create incentives for people to save, invest, get education, innovate and access new technologies. The way power is organized would always be at the root of the failure.
The importance of political institutions is that in them depends the ability of citizens to monitor, influence and obtain benefits of it. If they are strong and inclusive, they will prevent having people who abuse the power to amass their own fortunes and carry out their own agendas to the detriment of the rest of society. A key point is the ability of the state to regulate and govern the society and prevent the concentration of power and wealth in a few hands. Only with inclusive political institutions, that is, to protect private property, encourage innovation and create entrepreneurial incentives for everyone, you can overcome underdevelopment. That is, how to organize politics depends how the economy works.
We are in front of a masterpiece work that can mark a before and after in the disciplines related to political science, especially in schools that emphasize the importance of institutions; these have never received a theoretical and empirical support that big. The future of nations depends on how people organize their institutions and their rules. Although financial institutions are essential, consider that political institutions are the most crucial. The economy is doing behind the politics.
The Ten Things Managers Need to Know from Why Nations Fail
1. The country where we born determine the access of economic and social opportunities that you will have in your lifetime. There are countries that offer a lifetime of opportunities, full of possibilities. There are others whose offer consists of obstacles and hardships.
2. The quality of the institutions is the key factor of the prosperity of the countries and it is not affected it neither by culture, region, or religion.
3. The rich are rich because they developed institutions handing out economic activity and political power among more people. In the terminology of the book, the rich are rich today because yesterday created inclusive institutions, and non-extractive.
4. A society with extractive economic institutions does not respect property rights and investment incentives generated. In a society with extractive economic institutions, and invest effort becomes meaningless as far as the fruit of the effort can be expropriated. These are countries whose rules are designed to economically benefit the minority of the majority. They are societies in which resources are extracted by elite at the expense of society and the economic welfare of the rest of the population.
5. Extractive economic institutions coexist with extractive political institutions, institutions in which power is concentrated in a few hands and try to maintain and develop economic rules that benefit them personally and provide continuity in the political managerial power.
6. The majority of countries that flourish have the common factor of defense and protection of property rights in an economic environment that promotes investment, the creation and adoption of new technologies also stimulates the acquisition and development of skills and knowledge useful for the enterprise. This combination of factors occurs in countries whose economic institutions are inclusive.
7. Without quality institutions is impossible sustainability of growth, which relies on the possibilities of generating innovation, the emergence of new companies and regenerate answering the set, contributing to the spread of economic power.
8. Even though a country is well developed, one of the reasons why some countries do not adopt inclusive institutions is because of the fear of creative destruction. The fear of changing the balance of power makes countries prefer “better the devil you know than the devil you don’t know yet”.
9. The nations are going through what the authors call “institutional drift” and its institutions are changing, forward or reverse, marked largely by critical junctures. What is clear is that small institutional differences in a critical historical moment, is just magnified over time.
10. There are countries with initial advantages or disadvantages, but ultimately it is the structure of incentives that create institutions that determine whether a country moves along a path of progress or stagnate in poverty.
Full Summary of Why Nations Fail
Why intend countries fail to answer these questions with a new theory compelling and documented: not by climate, geography or culture, but by every country. Institutions through a lot of historical examples and current (from ancient Rome through the Tudor and reaching modern China) professors Daron Acemoglu and James A. Robinson show that to invest and prosper, people need to know that if they work hard, you can make money and, above all, keep it. This is where come into play and sound institutions in which power trust. Moreover authors in this book mixed economy, politics, history and current affairs to offer a new, powerful and persuasive to understand all the whys of wealth and poverty.
I. So Close and Yet so Different
Why some nations are more successful than others? Nogales (Arizona) and Nogales (Sonora) have the same population, culture and geography. Why one is rich and the other poor? Why did the Egyptians fill Tahrir Square to overthrow Hosni Mubarak? Why intend countries fail to answer these questions with a new theory compelling and documented: not by climate, geography or culture, but by institutions in each country. Through a wealth of historical and contemporary examples (from ancient Rome through the Tudor and reaching modern China) teachers Daron Acemoglu and James A. Robinson shows that to invest and prosper, people need to know that if they work hard, you can make money and, above all, keep it. That’s where sound institutions involved and you can rely on. Furthermore the authors in this book mixed economy, politics, history and current affairs to offer a new, powerful and persuasive to understand all the whys of wealth and poverty.
II. Theories That Don’t Work
The authors discuss several theories that tried to explain economic inequalities in the world and refute and explain why did not work. They discuss these three hypotheses: The geographic differences, the cultural differences and the hypothesis of ignorance. And gave their critics and opinions of why did not work.
Furthermore, the book shows us a map of the world by per capita income where the highest are in Western Europe (except Spain and Portugal), USA, Canada, Australia and Japan and the lowest in Africa and South America. To make this distribution of income set the bar higher in $ 20,000 per capita, which makes Spain (until recently eighth world power) and Portugal are relegated to the same category as Russia or Argentina. They believe there is a gap between rich and poor and remind us that if the price of oil fall then Middle Eastern countries that are now rich, could become poor. They wonder how to explain the crucial differences between rich and poor countries and their different growth models.
III. The Making of Prosperity and Poverty
The authors analyze the case of the two Koreas, two separate countries since 1950. The North, under a Communist regime stripping is poor, without training and entrepreneurship, and the South, from 90 democratic and pro-Western, is rich because it encourages and investment opportunities. The authors say that guarantee the right to private property is crucial for those who enjoy this right will be willing to invest and increase productivity.
In addition, they give the example of Barbados in 1680 when landowners were distributed judge charges and slavery was huge. Also, they needed roads and utilities. In Latin America there was private property but the Indian were unsafe. Therefore, the legal system should not discriminate or serve extractive institutions that aim to extract income and wealth of a subset of society to benefit a different subset.
Instead, create inclusive markets inclusive institutions that give freedom and opportunity to practice any profession, who have good ideas and be able to create businesses, and pave the way for technological innovation and education, leading to sustained development. Hence the success of Thomas Alba Edison, Bill Gates or Steve Jobs who did business because teenagers have access to the education they want or can achieve. Another example is the Samsung factory in South Korea.
Against this are absolutist political institutions, or worse, failed states like Somalia, where the state (Max Weber: The State has the monopoly of legitimate violence) is unable to impose law and order and is centralized.
The authors give the example of Mobutu in the Congo, where rode all for your service and for the sake of wealth had made some inclusive institutions would have to redistribute their wealth. Not only had the powerful people opposed to technology but also the unions that blocked many advances. In general, the powerful groups resisting the economic power and the engines of prosperity. One example was the king of the Congo, who had 500 musketeers in the seventeenth century, and then the public did not have option to no political power. After independence in 1960 were reproduced extractive institutions.
IV. Small Differences and Critical Junctures
The authors refer to the 1346 bubonic plague (The Black Death) which entered to China by the Black Sea and ended up with half of the affected population. The order came down because feudal lords were without servants. Given the shortage of labor, workers were able to be deleted fines, compulsory labor and other abuses. Attempts to impose abusive Workers Statute failed in England. But in other places, particularly in Eastern Europe, lords took over more land and cities lost freedoms, Eastern Europe exported more grain but by hard labor. Finely Glorious Revolution in England in 1688 provided more freedoms and limited the absolute power. This was after the industrial revolution began.
The authors compare the evolution of three monarchies as Philip II of Spain, Elizabeth I of England and Henry III of France. The three fought against citizen assemblies as the Courts, Parliament and the States General. There were small differences for the monopoly of trade with America, as England was conducted by merchants who became wealthy and could oppose absolutism. These small improvements fueled a virtuous circle while in France and Spain fell into a vicious circle. But still the situation was better than in Central and Eastern Europe, burdened by the easement.
In only three centuries since the Black Death there was a process of divergence.
They tell us that the defeat of the Spanish Armada in 1588 opened the Atlantic trade to the English and generated progress of England and its market economy settlers spread across North America while the South remained under a model extraction and high inequality. There was more severe in Africa where absolutism prevailed and slavery with the exception of Botswana. China and India with its caste also lagged. In contrast, in Japan Meiji Revolution triumphed that eradicated the feudal order and growth soared. In the Middle East, the Ottoman Empire imposed a colonial regime.
The authors say that the institutional theory explains better than those based on geography, culture ignorance or economic differences.
What both authors want to establish is:
How were inclusive institutions?
How persisted and continued the virtuous circle?
Extractive few absolutist governments and rejected the new technology of the industrial revolution?
How Europeans ended the possibility of economic growth in parts conquered?
How the vicious circle and the iron law of oligarchy can maintain extractive institutions which did not extend the industrial revolution continued poor?
Why the industrial revolution technologies have not been implemented in places with minimal centralization of the state?
Also, they say that areas transformed their institutions in a more inclusive, such as France or Japan, or prevented the establishment of extractive institutions, like the United States and Austria, were more receptive to the extension of the industrial revolution and ahead of others.
V. “I’ve Seen the Future, and It Works”: Growth Under Extractive Institutions
The authors review the evolution of the Soviet Union Economic under Stalin and the Five Year Plans of Gosplan, who took agricultural production after expropriating land and collectivize farms in order to feed the industrial workers and construction factories. In the rural area, production plummeted. There were 6 million dead from starvation. Despite being a less efficient than the free market, there was growth because the PC elite poured all their resources into the industry, which was very late. It was said that the planned economy was altruistic because it gave full employment, price stability or altruistic motivation. Also Samuelson predicted that in the 80s, the USSR would overtake USA. It was a quick but sustained development and ’70s the model is exhausted.
An important note is that according to the authors, the collapse of the USSR was because of extractive institutions as the Communist Party cannot generate sustained technological change and economic disincentives resistance by elites. It had trouble giving up resources efficiently and to make decisions.
Later, the authors examine the case of Congo, Kasai, bushongs and leles that were separated by a river. Some were poor and fighting each other while the others were rich and had advanced technologies because they had an extractive centralized absolutist king to collect taxes but brought some prosperity.
The problem with this growth, like the USSR, is that, according to these authors, there is no creative destruction.
Then go over the creation after the Long Summer (15,000 BC) of agricultural societies as natufienses on the Euphrates, Abu Hureyra and Mount Carmel. They believe that the elites led to sedentary people and then undertake agriculture. So think Jared Diamond began the horse because, really, institutional changes began first as a reorganization to take advantage of greater availability of animals and plants and only then came agriculture and religion.
The expansion of agriculture also spread the Mayan cities such as Copan, led by their kings and aristocracy. In the year 779, Copan had more inhabitants than Paris. But since there was no change and 300 kings and nobles dedicated to tax that created great inequality until 810 fought among themselves to overthrow the boss and take control and profits. The system disappeared because was not stable.
They believe that China will be the same.
VI. Drifting Apart
The authors speak of the decline of Venice between 1050 and 1350, because when the Venetian Republic ruled by the Doge and General Assembly offered incentives for youth to thrive through the institution of the encomenda generated a great economy but generations after members of the Great Council, which was once controlled by family groups, blocked access to new merchants, so that in 1297 eliminated the incentives for growth through Serrata – new appointments had to be approved by the Council of Forty while current needed no confirmation- The Grand Council became a hereditary aristocracy in 1315 with the Libro d’Oro or Gold Book. Moreover, they implemented a Settata economic and the prohibition of encomenda contracts. In addition, the state nationalized the trade Venetian galleys and collected more taxes. The long-distance trade was monopolized by the elite. Later, it declined.
The same happened to the Roman Empire that reached its expansion after the struggles of the Greco by calling for greater representation of commoners and laws; although excluding the slaves. In marine wrecks wealth is generated and there is evidence of Roman activity and pollution in the Greenland ice until the first century but it was an extractive economy dominated by the elite of the Senate (large landowners and aristocrats) at a site with an unequal distribution of land. All this was overthrown by Julius Caesar and the Roman Empire, which eliminated partially inclusive institutions such as the plebeian assembly passed the Senate whose powers and such. The fight of the elites to control the extractive power of Rome led to the collapse of continuous civil wars. Property rights for the common citizen were less certain. No emperor wanted to put more inclusive institutions. Increase the number of people to be citizens but with fewer rights than before. And technology stagnated. The Emperors dismissed incentivized or advances which could eliminate labor.
Vindolanda, the former Scotland, was poor in Roman times but because the fall of Rome, it became more developed and followed a divergent path to other provinces as Aksum (Ethiopia) where they were better settled feudal structures.
The legacy of the Roman republic survived until the Black Death and inclusive institutions were quickly adopted by free citizens.
VII. The Turning Point
In Elizabethan England were also rejected the technical innovations knitting machine Lee to not ruin the spinners. Because this required a process of creative destruction that would force Schumpeterian replace the old with the new. Politicians feared instability.
This chapter examines the importance of the signing of the Magna Letter by King John in 1215 to consult the barons before raising taxes and the creation of a council of 25 barons to force the king to fulfill. Although it was canceled, some consider it a step to pluralism. The difference is that year after parliament included merchants and rich farmers, not only to nobles. The Tudors created a centralized state and expropriated land to the Church. Later the Stuart wanted to be absolutist and could not.
VIII. Not on Our Turf: Barriers to Development
Talk about countries that hampered the development as a ban on the printing press in the Ottoman Empire, the reinforcement of absolutism in Spain led to the decline because there was no secure property rights and economic collapse to that there was no incentive to invest. In the case of Russia and Austria-Hungary, with Francis I, the rulers actively blocked any attempt to introduce technologies. And in China, in 1500, the Ching Dynasty distance impeded navigation just as Europeans were expanding in America and Asia.
The same happened with the absolutism of Prester John in Ethiopia who had insecure in the property rights because the emperor lands snatched every two or three years and whose institution was gult or feudal serfdom. In the nineteenth century, Ethiopia managed to stay independent and Melenik defeated Italy at the Battle of Adwa in 1896. Ras Tafari fell in 1935 but returned to the throne in 1941. Absolutist plan was followed in the country until 1978 and became the world’s poorest without light and subsistence agriculture.
The case of Somalia is worse because it has been dominated by six family clans structured payment groups diya (blood wealth) and legislated obligations by heer law. Political power is so widespread that almost is pluralistic but lacks the authority to impose a centralized state order and guarantee the property.
IX. Reversing Development
This chapter speaks about the genocide perpetrated by the Dutch in the Spice Islands in the seventeenth century, in the Moluccas, producing nail, mafia and nutmeg.
The Portuguese conquered Melaka in 1511 but failed to control the spice monopoly. Later the Dutch East India Company began signing exclusive contracts in Ambon that prohibit cultivate and banned others. They seized systems and labor taxes to get more performance.
In the Banda Islands, governed by city states and citizens’ assemblies, were massacred by the Dutch monopoly Coen to stay mace and nutmeg. Coen created a society of plantation there. In the remaining islands, pepper trees were cut. Following the destruction of its business, the area was doomed to exploitation and underdevelopment.
In Africa, there was slave trade that was bound for Africa itself first and then the sugar plantations of the Caribbean. In order to fill Europeans with slaves, there were wars and conflicts among Africans themselves, even there were laws to punishing with bondage every trifle. Following the abolition in 1807, traffic continued, although it started legitimate trade as palm oil and almonds. To increase plantings, kings Congolese and Ghanaian (Asante) forced the inhabitants to work coerced. Later on, South Africa created apartheid and the dual economy that prevented the native inhabitants concentrate on homelands or towns with small enough land to make a living independently and prevented them from access to education. In this way the Price of labor was cheapened.
In all cases there was the same pattern of looting by extractive institutions. The authors say that economic development is sometimes feeds the underdevelopment of others.
X. The Diffusion of Prosperity
It talks about the colonization of Australia by settlers who were prisoners and who achieved political rights. In the French Revolution, the introduction of inclusive institutions was not as peaceful but exportation allowed economic growth to countries like Belgium, Holland and several German states that were under Napoleon.
In Japan Meiji Revolution instituted westernized the country and out of the absolutism and feudalism of the shogun. The authors say that the roots of social inequality lie in the past centuries, when some countries adopted inclusive institutions and industrialization joined by creative destruction while others were stuck with absolutist regimes and commercial monopolies.
XI. The Virtuous Circle
This chapter talks about the virtuous circle. It takes as an example the Black Act of 1722 against cattle thieves’ nobles. Some were saved because the legal system in England was more certainty than before because I enjoyed the rule of law. Later the right to vote won, in accordance with the logic of virtuous circle that prevents abuse.
Another example is the destruction of trust in the United States or the preservation of the independence of the judges of the Supreme Court despite Roosevelt’s attempts to put people akin to their ideology. Instead, the authors say that Peron in Argentina related achievement and judges put the custom continued until Menem, which ratified. Argentina fell into a vicious circle, not virtuous.
XII. The Vicious Circle
The authors cite the example of what happened in Sierra Leone, which was left without a train because of the fear the rebellions have to the dictator. The same happened in Southern United States, where they endured marginalization of slavery a century after being abolished. That happened because the elites continued safe after the war.
The same happened also in Guatemala, where landowners forced to do hard labor to exploit coffee plantations. And the same happened in Ethiopia.
These are examples of what I call Michaels’s iron law of hierarchy, also called vicious negative feedback.
XII. Why Nations Fail Today
It mentions the Mugabe government in Zimbabwe and their luck to win the national lottery. Also talks about Stevens in Sierra Leone that impoverished the country and its successor Momoh that was even more exploitative. In addition, it mentions Colombia because despite its democratic elections, it does not have inclusive institutions.
This chapter does not forget North Korea and its absolutism. Or Karimov’s Uzbekistan and cotton business to the point that even the children work. However, privatization has also been initiatives in Egypt
XIV. Breaking the Mold
The authors talk about how to break the mold. They cite the success of Botswana, which became more egalitarian than the rest of the region because in the nineteenth century three leaders traveled to England to seek protection from Queen Victoria of England. The English only asked to install a train track and through this agreement could safeguard native diamond mines whose production reverberated throughout the village. Exemplified a trader contacted Botswana Railway Station South Africa still under apartheid, for a quote to ship a commodity and it turns out being charged four times as a target by the fact of being black, which discouraged any indigenous entrepreneurship.
The chapter also recalls the struggle for civil liberties in the U.S. in the 60s, as the secretary Rosa Parks refused to get up from a seat reserved for whites and after being reported there was a boycott of the bus company in Alabama, or the black college student who was the first to enroll in a university in the South and was escorted by 300 police until he graduated.
Another example was the reform in China in recent times as Mao and Deng Xiao Ping managed to reform the state from within to open the economy.
XV. Understanding Prosperity and Poverty
The last chapter focuses on China as its reforms undertaken to grow and IMF rejects introducing designs to shoehorn Washington consensus, privatization and anti-corruption measures but that the rulers of the countries only apply facade rescued. It mentions the independence of The Central Bank of Zimbabwe as an example, even though the director knew he could not go against the dictates of their president.
In addition, it mentions that foreign aid to poor countries have failed because in them there is no real democracy but function as absolutist regimes. It should be given if they meet conditions to liberalize markets. Also, it approaches the success of Brazil to democratize union activity after Lula Da Silva, who allowed greater market liberalization.
The Video Lounge
The video shows an interview with PhD. Daron Acemoglu, economist and co-author of “Why Nations Fail”, with Ryan Avent from The Economist. Basically, the interview talks about the economic success or failure of nations and how is rooted in the health of political and social institutions.
The video shows an interview for MIT with PhD. Daron Acemoglu, economist and co-author of “Why Nations Fail”. Daron Acemoglu talks about the main idea of the book and why cultural explanations of prosperity fail. Acemoglu tells us his own interpretation of the history.
What I think:
The authors are one of the most brilliant people around because they have classified the institutions as extractive or inclusive institutions. Also, they have showed us that those correspond to systems in which elite appropriates for the benefit of the work and the innovative capacity of the inhabitants, discouraging work. The inclusive create systems that encourage innovation, productivity and operations. They promote education, health, the rights of the individual and the certainty that they will be respected and not dependent on the will of the warlords. And, I think it is very interesting to learn how the past has affected many of the regions in the present.
If I were the author of the book, I would have done these three things differently:
1. I would have written the way to address the ideas to the public differently. The book presents different facts from the ice age era to the present and some of those facts were not developed for a public without economic background or knowledge, and the reason is because there are people that like economic/business relate it books but books easy to swallow.
2. I would have given and have designed solutions in order to help countries to be more prosper and richer. The book should not only show us theories about why nations are poorer than others, but it also should show us more concrete solutions to improve the welfare of the people of those countries.
3. Probably, I would have given more illustrations about the regions they were discussing in the book in order to compare their wealth, power, and prosperity. The authors gave us example of places like Colombia, Nogales, Sierra Leona, Zimbabwue, Somalia, and others but, how can I compare those regions to USA, UK, etc. if I do not know the living conditions of those places? There are people that have never been or heard about the places I previously mention. People can suppose how they are just by what they are reading, but I would be a good idea to recreate their imagination with some images.
Reading this book made me think differently about the topic in these ways:
1. The book makes me realize in how politics interfere in economical and administrative decisions. Politics has to intervene in the economy and society to create laws that apply to the same economy and society. The benefits that bring these laws are applied to the economy and society functioning live well and this can lead to economic growth and developments in the town for a better quality of life. But, if the political system of a country is corrupted and only politicians get benefits of the country’s prosperity, it would be a disaster for the country’s growth and for the quality of life of the residents.
2. Also, how some nations can be richer than others, even though there are in the same geographic location, have same culture, etc. Usually, we said countries are rich and the other poor because “some countries are good and others are bad”. The rich is rich because they work hard, have knowledge and education, are efficient and productive, and they have a good location. The poor is poor because they are weak, innocent, virtuous and vulnerable. The truth is that countries depend on a good political system in order to have a good development. It depends of the persons that govern, not the region. And, we have to take under consideration that most of the richest countries in the world are rich because for centuries they have had good governments that do not think for themselves, but for the rest of the people that live in the area.
I’ll apply what I’ve learned in this book in my career by:
1. I would use the knowledge I have gotten from the book and promote the use of inclusive system instead of extractive. Also, encourage participation of great people in economic activities and promote the use of their best skills. I feel that can be beneficial for the company and the country.
2. I would also take under consideration inclusive systems while working for a corporation. As a management major, I believe it is important to have a system that will protect individual rights. Also, implementing an inclusive system in your company can secure private property and encourage entrepreneurship. At the end the result is higher incomes and improved human welfare, which is beneficial to every company.
Here is a sampling of what others have said about the book and its author:
“This fascinating and readable book centers on the complex joint evolution of political and economic institutions, in good directions and bad. It strikes a delicate balance between the logic of political and economic behavior and the shifts in direction created by contingent historical events, large and small at ‘critical junctures.’ Acemoglu and Robinson provide an enormous range of historical examples to show how such shifts can tilt toward favorable institutions, progressive innovation and economic success or toward repressive institutions and eventual decay or stagnation. Somehow they can generate both excitement and reflection.” -Robert Solow, Nobel Laureate in Economics, 1987
“It’s the politics, stupid! That is Acemoglu and Robinson’s simple yet compelling explanation for why so many countries fail to develop. From the absolutism of the Stuarts to the antebellum South, from Sierra Leone to Colombia, this magisterial work shows how powerful elites rig the rules to benefit themselves at the expense of the many. Charting a careful course between the pessimists and optimists, the authors demonstrate history and geography need not be destiny. But they also document how sensible economic ideas and policies often achieve little in the absence of fundamental political change.”-Dani Rodrik, Kennedy School of Government, Harvard University
“Two of the world’s best and most erudite economists turn to the hardest issue of all: why are some nations poor and others rich? Written with a deep knowledge of economics and political history, this is perhaps the most powerful statement made to date that ‘institutions matter.’ A provocative, instructive, yet thoroughly enthralling book.” -Joel Mokyr, Robert H. Strotz Professor of Arts and Sciences and Professor of Economics and History, Northwestern University
“A brilliant and uplifting book-yet also a deeply disturbing wake-up call. Acemoglu and Robinson lay out a convincing theory of almost everything to do with economic development. Countries rise when they put in place the right pro-growth political institutions and they fail-often spectacularly-when those institutions ossify or fail to adapt. Powerful people always and everywhere seek to grab complete control over government, undermining broader social progress for their own greed. Keep those people in check with effective democracy or watch your nation fail.” -Simon Johnson, co-author of 13 Bankers and professor at MIT Sloan
“This important and insightful book, packed with historical examples, makes the case that inclusive political institutions in support of inclusive economic institutions are key to sustained prosperity. The book reviews how some good regimes got launched and then had a virtuous spiral, while bad regimes remain in a vicious spiral. This is important analysis not to be missed.” - Peter Diamond, Nobel Laureate in Economics
“Acemoglu and Robinson have made an important contribution to the debate as to why similar-looking nations differ so greatly in their economic and political development. Through a broad multiplicity of historical examples, they show how institutional developments, sometimes based on very accidental circumstances, have had enormous consequences. The openness of a society, its willingness to permit creative destruction, and the rule of appear to be decisive for economic development.” -Kenneth Arrow, Professor Emeritus, Stanford University, Nobel Laureate in Economics, 1972
All of these reviews that I have found about the book “Why Nations Fail” seem to be very similar to each other. Each reviewer seemed to have enjoyed this book and have recommended it by 100%. I definitely think this book should be read by everyone because the authors explain in detail the evolution of societies throughout the ages and how the economic development and growth of nations is affected it.
De Zárate, Francisco. (2012, September 2). Por qué fracasan las naciones. Retrieved from http://www.ieco.clarin.com/economia/fracasan-naciones_0_766723525.html
Dizikes, Peter. (2012, March 23). All the difference in the World. Retrieved from http://web.mit.edu/newsoffice/2012/why-nations-fail-0323.html
Gates, Bill. (2013, February 26). Why Nations Fail: The Origins of Power, Prosperity, and Poverty (Book Review). Retrieved from http://www.thegatesnotes.com/Books/Personal/Why-Nations-Fail
Green, Duncan. (2012, December 12). Why ‘Why Nations Fail’ Fails (Mostly): Review of Acemoglu and Robinson – 2012’s Big Development Book. Retrieved from http://blogs.worldbank.org/publicsphere/why-why-nations-fail-fails-mostly-review-acemoglu-and-robinson-2012s-big-development-book
Friedman, Thomas. (2012, March 31). Why Nations Fail. Retrieved from http://www.nytimes.com/2012/04/01/opinion/sunday/friedman-why-nations-fail.html?_r=0
Rueda, María Isabel. (2012, September 13). Por qué fracasan las naciones? Retrieved from http://www.drclas.harvard.edu/drupal/node/1351
About the Publisher
David C. Wyld (email@example.com) is the Laborde Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. He also serves as the Director of the Reverse Auction Research Center (http://reverseauctionresearch.org), a hub of research and news in the expanding world of competitive bidding. His blog, Career News 24/7, can be viewed at http://wyld-about-careers.blogspot.com/.