Review of ‘Why Nations Fail’

Review of ‘Why Nations Fail’ by Daron Acemoglu and James A. Robinson

I find economics fascinating. I studied some in university if just a few courses. I have traveled around the world, and have always wondered, why are some nations so rich, and some so poor? This book provides a good economic theory to answer that question.
The authors first make a distinction between extractive and inclusive economic and political institutions.
Inclusive environments lead to on-going prosperity, while extractive environments may see growth but always top out and stagnate as those societies battle over the spoils.
Inclusive economic and political institutions enforce property rights, create level playing fields, encourage investment in new technology and skills. There are incentives to people and businesses to invest and grow, with the knowledge their capital, efforts or ideas will not be stolen by powerful politically connected groups, and that new ideas, ‘creative destruction’, will not be blocked by embedded forces in the economy.
There is an open pluralistic quality to the inclusive institutions and economic systems.
The authors trace the history in a fascinating work that provides a good explanation to my ongoing questions. Highly recommended.
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March 11, 2025 at 5:44 PM

ISBN 978-0-307-71921-8