Daron Acemoglu And James Robinson

Why Nations Fail: The Origins of Power, Prosperity, and  Poverty


Brilliant and engagingly written, Why Nations Fail answers the question that has stumped the experts for centuries: Why are some nations rich and others poor, divided by wealth and poverty, health and sickness, food and famine?


Is it culture, the weather, geography? Perhaps ignorance of what the right policies are?
Simply, no. None of these factors is either definitive or destiny. Otherwise, how to explain why Botswana has become one of the fastest growing countries in the world, while other African nations, such as Zimbabwe, the Congo, and Sierra Leone, are mired in poverty and violence?


Daron Acemoglu and James Robinson conclusively show that it is man-made political and economic institutions that underlie economic success (or lack of it). Korea, to take just one of their fascinating examples, is a remarkably homogeneous nation, yet the people of North Korea are among the poorest on earth while their brothers and sisters in South Korea are among the richest. The south forged a society that created incentives, rewarded innovation, and allowed everyone to participate in economic opportunities. The economic success thus spurred was sustained because the government became accountable and responsive to citizens and the great mass of people. Sadly, the people of the north have endured decades of famine, political repression, and very different economic institutions—with no end in sight. The differences between the Koreas is due to the politics that created these completely different institutional trajectories.


Based on fifteen years of original research Acemoglu and Robinson marshall extraordinary historical evidence from the Roman Empire, the Mayan city-states, medieval Venice, the Soviet Union, Latin America, England, Europe, the United States, and Africa to build a new theory of political economy with great relevance for the big questions of today, including:

– China has built an authoritarian growth machine. Will it continue to grow at such high speed and overwhelm the West?
– Are America’s best days behind it? Are we moving from a virtuous circle in which efforts by elites to aggrandize power are resisted to a vicious one that enriches and empowers a small minority?
– What is the most effective way to help move billions of people from the rut of poverty to prosperity? More
philanthropy from the wealthy nations of the West? Or learning the hard-won lessons of Acemoglu and Robinson’s breakthrough ideas on the interplay between inclusive political and economic institutions?


Why Nations Fail will change the way you look at—and understand—the world.



Published 3 months ago by Ken McCormick

This review is from: Why Nations Fail: The Origins of Power, Prosperity, and Poverty (Hardcover)
Customer review from the Amazon Vine™ Program (What’s this?)
Why are some nations rich and others poor? The question has occupied economists since Adam Smith wrote An Inquiry into the Nature and Causes of the Wealth of Nations. As Nobel laureate Robert Lucas said, once you start thinking about that question, “it is hard to think about anything else.” Daron Acemoglu and James Robinson have been thinking hard about it, and Why Nations Fail provides their answer.

Their main thesis is “that while economic institutions are critical for determining whether a country is poor or prosperous, it is politics and political institutions that determine what economic institutions a country has” (page 43). That the right economic institutions are vital has long been recognized; what Acemoglu and Robinson do is emphasize the critical role of politics. They argue that an inclusive political system will allow for an inclusive economic system. Such a system provides incentives for people to acquire skills, work hard, save, invest, and, most importantly, innovate. In contrast, an extractive political system exists for the benefit of a narrow elite, and creates an extractive economic system. The masses cannot influence the political system, and have no incentives to exert themselves creating wealth that will be taken from them by the political elites. Extractive economic systems can achieve growth for a short while, but cannot achieve persistent growth. That is because they cannot generate significant technological change and because there will be infighting over the system’s spoils.

The authors provide a wealth of historical examples from all over the world and from ancient to modern times. The numerous examples allow the authors to illustrate their ideas with concrete examples. It also allows them to debunk many of the popular explanations for why some nations are rich and others are poor: geography, culture, and ignorance. After you read this book, you will wonder why you ever thought those ideas made any sense at all.

Overall, this is an excellent, informative, and thought-provoking book. My major complaint is that it could have used a good editor. It is repetitive in places. The authors also sometimes get carried away discussing irrelevant historical details. For example, do we really need to know that Geiseric, king of the Vandals, had his first marriage annulled and sent his ex-wife home, but not before he cut off her ears and nose? Nevertheless, this is a book worth reading by anyone interested in alleviating global poverty. I especially recommend it to the Don Quixotes who think that just a little more aid will make poor countries rich.


Leave a Reply

Your email address will not be published. Required fields are marked *