book review on why nations fail

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Inclusive vs Extractive

Normally, I’m fairly positive about the books I review, but here’s one I really took issue with.

Why have some countries prospered and created great living conditions for their citizens, while others have not? This is a topic I care a lot about, so I was eager to pick up a book recently on exactly this topic.

Why Nations Fail is easy to read, with lots of interesting historical stories about different countries. It makes an argument that is appealingly simple: countries with “inclusive” (rather than “extractive”) political and economic institutions are the ones that succeed and survive over the long term.

Ultimately, though, the book is a major disappointment. I found the authors’ analysis vague and simplistic. Beyond their “inclusive vs. extractive” view of political and economic institutions, they largely dismiss all other factors—history and logic notwithstanding. Important terms aren’t really defined, and they never explain how a country can move to have more “inclusive” institutions.

For example, the book goes back in history to talk about economic growth during Roman times. The problem with this is that before 800AD, the economy everywhere was based on sustenance farming. So the fact that various Roman government structures were more or less inclusive did not affect growth.

The authors demonstrate an oddly simplistic world view when they attribute the decline of Venice to a reduction in the inclusiveness of its institutions. The fact is, Venice declined because competition came along. The change in the inclusiveness of its institutions was more a response to that than the source of the problem. Even if Venice had managed to preserve the inclusiveness of their institutions, it would not have made up for their loss of the spice trade. When a book tries to use one theory to explain everything, you get illogical examples like this.

Another surprise was the authors’ view of the decline of the Mayan civilization. They suggest that infighting—which showed a lack of inclusiveness—explains the decline. But that overlooks the primary reason: the weather and water availability reduced the productivity of their agricultural system, which undermined Mayan leaders’ claims to be able to bring good weather.

The authors believe that political “inclusiveness” must come first, before growth is achievable. Yet, most examples of economic growth in the last 50 years—the Asian miracles of Hong Kong, Korea, Taiwan, and Singapore—took place when their political tended more toward exclusiveness.

When faced with so many examples where this is not the case, they suggest that growth is not sustainable where “inclusiveness” does not exist. However, even under the best conditions, growth doesn’t sustain itself. I don’t think even these authors would suggest that the Great Depression, Japan’s current malaise, or the global financial crisis of the last few years came about because of a decline in inclusiveness.

The authors ridicule “modernization theory,” which observes that sometimes a strong leader can make the right choices to help a country grow, and then there is a good chance the country will evolve to have more “inclusive” politics. Korea and Taiwan are examples of where this has occurred.

The book also overlooks the incredible period of growth and innovation in China between 800 and 1400. During this 600-year period, China had the most dynamic economy in the world and drove a huge amount of innovation, such as advanced iron smelting and ship building. As several well-regarded authors have pointed out, this had nothing to do with how “inclusive” China was, and everything to do with geography, timing, and competition among empires.

The authors have a problem with Modern China because the transition from Mao Zedong to Deng Xiaoping didn’t involve a change to make political institutions more inclusive. Yet, China, by most measures, has been a miracle of sustained economic growth. I think almost everyone agrees that China needs to change its politics to be more inclusive. But there are hundreds of millions of Chinese whose lifestyle has been radically improved in recent years, who would probably disagree that their growth was “extractive.” I am far more optimistic than the authors that continued gradual change, without instability, will continue to move China in the right direction.

The incredible economic transition in China over the last three-plus decades occurred because the leadership embraced capitalistic economics, including private property, markets, and investing in infrastructure and education.

This points to the most obvious theory about growth, which is that it is strongly correlated with embracing capitalistic economics—independent of the political system. When a country focuses on getting infrastructure built and education improved, and it uses market pricing to determine how resources should be allocated, then it moves towards growth. This test has a lot more clarity than the one proposed by the authors, and seems to me fits the facts of what has happened over time far better.

The authors end with a huge attack on foreign aid, saying that most of the time, less than 10% gets to the intended recipients. They cite Afghanistan as an example, which is misleading since Afghanistan is a war zone and aid was ramped up very quickly with war-related goals. There is little doubt this is the least effective foreign aid, but it is hardly a fair example.

As an endnote, I should mention that the book refers to me in a positive light, comparing how I made money to how Carlos Slim made his fortune in Mexico. Although I appreciate the nice thoughts, I think the book is quite unfair to Slim. Almost certainly, the competition laws in Mexico need strengthening, but I am sure that Mexico is much better off with Slim’s contribution in running businesses well than it would be without him.

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The Journal for Student Geographers

A review of ‘Why Nations Fail’

By Fintan Hogan, King Edward VI Camp Hill School for Boys

Acemoglu, Daron., and James A. Robinson. Why Nations Fail : The Origins of Power, Prosperity, and Poverty. London: Profile, 2012.

Hogan, F. (2020) A review of ‘Why Nations Fail’.  Routes  1(2): 251–255.

This piece reviews the 2012 book Why Nations Fail , co-authored by Daron Acemoglu and James A. Robinson (Acemoglu & Robinson, 2012). Their work focuses on the role of institutions in fostering development; specifically economic institutions like secure property rights and political institutions like free and fair elections – structures that commonly develop hand-in-hand. However, throughout the book, the authors write as we would expect geographers to do; frequently contextualising their argument with broader quantitative and qualitative data. Despite an apparent focus on the economic and the political, the social aspects of geography validate their argument throughout.

1. Introduction

Political accountability means the powerful can no longer rob the weak. That’s the basic premise of Why Nations Fail , with a consistent focus on the political and economic rights afforded to people over the last few millennia. The book may more accurately be called ‘Why Nations Succeed’ , since the authors draw policy prescriptions from some of the most advanced economies of each era. Reviewing a book which explicitly rejects geography as an explanation for development may appear counter-intuitive for Routes , but on reflection, the premise put forward by Acemoglu and Robinson is crucial to any understanding of development dynamics seen through a geographical lens. Daron Acemoglu is a Professor of Economics at MIT and James Robinson teaches Economics at the University of Chicago – it makes sense then, that they would see economic institutions as uniquely pivotal throughout. While Chapter 2, entitled ‘Theories That Don’t Work’, rejects ‘The Geography Hypothesis’ (p48), one should not be so quick to believe that the discipline has little to learn from their conclusions. On the contrary, geographers are concerned with the flow of information, expansion of trade and progression of inequality, all of which play pivotal roles in the authors’ premise.

Daron Acemoglu and James A Robinson offer a concise summary of their premise in the very final line of the book: ‘…durable political reform, will depend, as we have seen in many different instances, on the history of economic and political institutions, on many small differences that matter and on the very contingent path of history’ (p462). To use their own terminology, the argument held throughout the book is that development is only sustained through ‘inclusive economic and political institutions’, supported through a ‘virtuous’ positive feedback cycle – illustrated through charting the Neolithic, Industrial and Technological Revolutions. Through this, they reject ‘extractive political and economic institutions’ which facilitate growth for a short amount of time (catch-up) and profit very few people, stalling ‘creative destruction’ and generating ‘vicious’ cycles. As such, low taxes and strong central government are seen as important characteristics of a nation’s success. An example of how this may develop in practice could be citizen assemblies or unions providing some political accountability – through this, the economic security of workers grows, and development follows. In advancing their argument, the authors use a wealth of historical sources in what becomes a compelling and universal argument.

2. A more nuanced view of geography

In fact, what the authors reject in Chapter 2 is physical geography ; the site and situation which people find themselves in. This theory has been termed environmental, or geographical, determinism and has been repopularised by academics like Jared Diamond of Guns, Germs and Steel fame (Diamond, 1999). Prisoners of Geography is another popular text in this vein, emphasising the importance of the physical environment on modern-day geopolitics (Marshall, 2015). These readings are sometimes termed ‘man-land geography’ too, emphasising the interaction between the natural environment and those who rely on it. To a certain extent, Acemoglu & Robinson are correct in their reasoning that broadly similar climates and reliefs can yield vastly different results, and they use colonial and post-colonial Congo to illustrate localised disparities (p58). 

Despite this, they appear to neglect the fact that modern technology still overwhelmingly benefits from a positive location. Geographers from as early as GCSE learn of hydropower and its benefits to Ethiopia, alongside containerisation and how it fails to help landlocked Malawi or mountainous Nepal. Despite this, their argument broadly holds true – on the whole, regions with similar soils, coasts and rainfall can have hugely divergent development pathways. They argue that small changes in institutions are widened into cavernous gaps following ‘critical junctures’ – for example, the decentralised workforce of England led to the Peasants Revolt following the Black Death; this improved working conditions, unlike in much of Eastern Europe (p96). Now you may ask, doesn’t this sound a lot like history? Indeed it does, and this is what continually struck me while reading. The use of the phrase ‘contingent path of history’ to wrap up the entire book shows this clearly and demonstrates how their argument rests on singular people and events, rather than trends or patterns, as indeed does the term ‘critical junctures’.

3. Geography underpins the argument

Well what does Geography offer to this reading? Unquestionably a huge amount. The concept Acemoglu and Robinson revere in particular is participation – using the example of the Glorious Revolution (1688), the authors argue that a broad coalition of interests acts as an effective set of checks and balances within the group, supporting the introduction of equality and representation. What geography shows here is how these groups of people emerge, regardless of individual figures, in a collection of diverse interests. Understanding wealth and its distribution is shared with Economics, but underpinning a geographical perspective is the idea of social capital, inclusivity and community – the authors themselves seem to recognise this with the divergence in the distribution of serfdom across Europe by 1800 (p108). While all European peasants in the early Middle Ages were subjugated to feudalism, by the 19 th century the western European poor had strong social cohesion, fuelled by urbanisation, while those in eastern Europe still remained scattered, facing coerced farm labour. Demography and culture are as important as any purely economic factor – geography highlights the importance of place to this institutional drift.

One needs to look no further than the A Level Changing Places topic to understand how, as geographers, we can understand a community, looking beyond their economic or political standing, in a way which ‘the contingent path of history’ often relies on. It is easy to argue that historical events drive development, because every occurrence can be seen as a direct cause. However, the authors’ historical accounts are frequently contextualised by pieces of relevant data, demonstrating the importance of a wider societal understanding which underpins everything that the book has to offer. Understanding development through a geographical perspective offers the sort of coherent wider picture which the authors rely on throughout.

4. Conclusion

In short, geography is crucial to understanding the conditions which allow for the emergence of institutional reform, rather than attributing change just to single political figures or fateful events. In the modern world, this exposes itself through free trade and the exchange of services, individuals and ideas. The very first example in the book used Nogales, USA and Nogales, Mexico (a city divided by a fence) to highlight extreme inequality (p7). In the 21 st century, we attribute this to policy attitudes towards loans, welfare, property rights and globalisation. While the authors here employ the catch-all term of ‘institutions’, what the readers of this journal will be able to ascertain is far deeper. As geography students and researchers, we can perceive far more from history than what just individuals or economics can tell us. Without this wider view, historians would fail to really understand the preconditions for development (Rostow, 1959), using circular logic to suggest that developed economies must have experienced ‘good development’ and underdeveloped ones ‘bad’. Incorporating the authors’ ideas into academic studies is likely to give students another insight into development factors, and their global exploration contextualises some key areas of GCSE and A Level content. Geography moves beyond a narrow idea of development, complimenting and supporting the entire premise of the text. I would encourage you to perhaps pick up a copy of this 500-page tome – it’s worth a read.

5. References

Acemoglu, D & Robinson, J.A. (2012) Why Nations Fail: The Origins of Power, Prosperity and Poverty , New York: Crown

Diamon, J (1999) Guns, germs and steel: The fates of human societies , New York: WW. Norton & Co.

Marshall, T (2015) Prisoners of Geography: Ten Maps That Tell You Everything You Need to Know About Global Politics , London: Elliott & Thompson

Rostow, W (1959) The Stages of Economic Growth , The Economic History Review, New Series, Vol 12, No. 1, pp1-16

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Why Nations Fail Summary

1-Sentence-Summary: Why Nations Fail dives into the reasons why economic inequality is so common in the world today and identifies that poor decisions of those in political power are the main reason for unfairness rather than culture, geography, climate, or any other factor.

Favorite quote from the author:

Table of Contents

Video Summary

Why nations fail review, audio summary, who would i recommend the why nations fail summary to.

Why do some nations prosper while others struggle and are plagued with poverty and greed? Some people say it has everything to do with a nation’s location, culture, or lack of knowledge. But surely this can’t be the whole picture. 

Just look at Botswana. It currently has one of the fastest increasing economies in the world. Meanwhile, close by Congo and Sierra Leone are stuck in a cycle of violence and poverty. 

Why Nations Fail by Daron Acemoglu and James A. Robinson centers around the question of why some nations remain poverty-stricken while others live in abundance. In this eye-opening book, the authors explain that the difference is actually the result of economic and political institutions put in place during critical junctures in history. 

Here are just 3 of the many eye-opening lessons I got from this book

• The best way to explain the difference in living standards between countries is by looking at their institutional differences. 
• A single event at a critical juncture can mean a world of difference for a country’s success. 
• It can be really hard to break out of the cycle of poverty, but it is possible. 

Let’s get right to it and see what we can discover about inequality!

If you want to save this summary for later, download the free PDF and read it whenever you want.

Lesson 1: If you want to explain why two countries can have such different living standards,  just look at the institutions they have put in place.

Forget age-old theories that some countries struggle economically because of their location. There are far too many countries next to each other that have different living standards to prove this as false. 

The economic landscape determines the difference between these countries. These are the regulations directing the economy within a country’s borders. This includes things such as public services, property laws, and access to financing . 

A country can have either inclusive or extractive economic institutions. Inclusive economic institutions pave the way for economic success because they encourage citizens to participate in economic activities. They are strong in economic freedom. 

Examples of this include South Korea and the USA, where the economy benefits from private property laws, developed banking sectors, and strong public education.  This system encourages people to work hard and be creative because they know their efforts will bring wealth . 

An extractive economic institution receives income from one group in society for the benefit of another group. An example of this is colonial Latin America, which had a system built on the exploitation of indigenous people to benefit colonizers. Another example is North Korea, where the Kim family created a repressive regime that didn’t allow private property and secured all power for the select elite only.

Lesson 2: One event can mean a country takes an entirely different institutional path, changing the course of its future.

In the mid-fourteenth century, the Black Death took almost half of Europe’s population. This was an event influential enough to overturn the sociopolitical balance of a nation or continent. 

Before the Black Death, most of the economic and political systems in Europe were extremely extractive. A country’s monarch owned land, and he gave his land to lords who promised to give military capabilities in return. Peasants would then take care of the land. They worked hard to make a living but paid most of what they earned in taxes and had almost no freedoms. 

But when the Black Death hit, there were suddenly huge shortages in labor. The peasants in Western Europe seized this opportunity to demand lower taxes and more rights.  Eastern European peasants were not so lucky. They were less organized, and landowners managed to take advantage of this and started hiking taxes higher and making the system even more extractive.  

This is why the authors call the Black Death a critical juncture in history. For Western Europe, it spelled the end of extractive feudalism. But in the east, it grew worse. Institutional drift is the result of this difference that led to divergent paths. It’s where two similar regions grow in different directions. 

We saw a similar institutional drift when global trade expanded, and the British colonized the Americas . Sometimes it takes centuries, but a small number of critical junctures can mean institutional drift that creates drastically different economic landscapes between once-similar areas.

Lesson 3: Stopping the cycle of poverty can be extremely hard, but it isn’t impossible.

We know that events in history can change the course of a country’s future. But what can countries do to fix the extractive institutions they have in place? 

First, the authors explain that history doesn’t necessarily doom the future of these countries. We know that inclusive and extractive institutions can grow from critical junctures. The cycle can be broken. 

The US South’s exclusive institutions against Blacks are slowly becoming more economically and politically inclusive. There is still a lot to be done, but the civil rights movement meant that good changes were finally coming for Blacks in America. 

So what can we do? The first thing to do is make sure we encourage inclusive institutions so these countries can grow their own prosperity. Did you know foreign aid does very little to change extractive institutions in Africa and central Asia? 

If we want to promote positive , long-lasting change, we need to direct foreign aid in a more meaningful way. The groups that are excluded from institutions need to have ways to defy the oppressing institutions.  

For example, in Brazil, a grassroots movement of empowered people rather than politicians overthrew the country’s military dictatorship in 1985. Social movements led by these people paved the way for a coalition that resisted any future dictatorships. 

Ever since Brazil broke that cycle, it has seen a huge rise in prosperity. In fact, between the years 2000 and 2012, it was one of the world’s fastest-growing economies. This serves as proof that shattering the chains of poverty is never too late.

Why Nations Fail will change the way you see the world. I never realized that such simple differences in institutions could mean such drastic differences in standards of living. I think this is an extremely important book that everyone can learn something from.

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The 56-year-old who hasn’t even been able to figure out why some countries prosper while others stay poor, the 19-year-old who is majoring in political science, and everyone who wonders how we can end the awful pandemic of inequality.

Last Updated on December 5, 2022

Luke Rowley

With over 450 summaries that he contributed to Four Minute Books, first as a part-time writer, then as our full-time Managing Editor until late 2021, Luke is our second-most prolific writer. He's also a professional, licensed engineer, working in the solar industry. Next to his day job, he also runs Goal Engineering, a website dedicated to achieving your goals with a unique, 4-4-4 system. Luke is also a husband, father, 75 Hard finisher, and lover of the outdoors. He lives in Utah with his wife and 3 kids.

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Review: Why Nations Fail

To forgo reading Why Nations Fail – a weighty but intensely engaging investigation of the determinants of economic prosperity – is, it seems, to risk being left out of the conversation of the day on political economy. Widely discussed in recent weeks, the book, the work of MIT’s Daron Acemoglu and Harvard’s James A. Robinson, takes as its sizable task a compelling account of what makes for a successful nation. The answer emerges over the course of the book’s 500 pages through a series of historical case studies designed to hammer in a central point: economic success is the product of particular political institutions, and the political institutions that breed success are “inclusive” as opposed to “extractive.” Pluralism begets prosperity; by the same token, autocracy begets decline.

The book opens with the case of the bisected town of Nogales, whose split halves lie in Arizona and Mexico respectively. The town represents, from the perspective of the authors’ hypothesis, a beautiful natural experiment, one that is returned to repeatedly and joined later in the book by other borderland examples: two populations separated neither by space nor by culture, but instead by their governing institutions. In that regard, the great disparity in wealth and health between the two sides of Nogales makes for a powerful opening salvo, the first of a number to come. The town is then used to open a historical sketch of the contrasting colonial experiences of North and South America as an introduction to the work’s thesis, which hybridizes economic and political concerns through a discussion of institutional structures that either work to spread opportunity and incentivize economic activity or to concentrate wealth and influence in the hands of a fortunate few. Acemoglu and Robinson summarize the large-scale structure of their argument at the end of this introductory jaunt through the history of the Americas:

It is about the effects of institutions on the success and failure of nations – thus the economics of poverty and prosperity; it is also about how institutions are determined and change over time, and how they fail to change even when they create poverty and misery for millions – thus the politics of poverty and prosperity.

Over the course of the book, the authors largely execute this program as promised. Leaping from continent to continent, the authors build a substantial catalogue of examples to bolster their case. From Botswana to Uzbekistan, the same arguments hold sway: extractive political institutions dedicated to the wellbeing of the elite breed similarly extractive, and counter-productive, economic institutions, while the same holds for the transmissible benefits of inclusive political institutions that meaningfully guarantee property and political rights.

The implications of Acemoglu and Robinson’s thesis are at times hopeful, at others unsettling, and overall distinctly controversial. First, the unsettling: the authors argue that the reciprocal relationships between political and economic structures produce vicious and virtuous circles in the cases of extractive and inclusive institutions respectively. On a global scale, then, when it rains it pours; the rich getting richer while the poor fall deeper into poverty. Growth, while achievable under extractive institutions, isn’t sustainable under the same circumstances, the authors argue, an observation that hardly offers reassurance to those concerned about growing inequality worldwide. At the same time, there is a ray of hope: as Acemoglu and Robinson note, “neither the vicious nor the virtuous circle is absolute.” It is possible, in the pair’s view, to effect meaningful change to extractive institutions on the heels of particularly disruptive or revolutionary events, what the two label “critical junctures,” like the Black Death or the Industrial Revolution. Most contentious of the authors’ findings, perhaps, is their assertion that China’s growth will not only slow from the breakneck pace that has characterized its development over the past several decades but will gradually stall out unless accompanied by political reform. All of their findings though, whatever their character, are of tremendous import for the conversation on international economics, and Why Nations Fail is a valuable book to pick up not just for exposure to hot topics in development but for a more serious engagement with one particularly powerful vision of the mechanisms behind them.

The work’s strong points aside, there are nits to be picked, some small, some larger. For one, in addressing itself to a lay audience the book necessarily handicaps itself; the statistical analyses undergirding many of the authors’ claims are consigned to references in the book’s length bibliographic essay. That isn’t to say that the book doesn’t make its argument well; it does, but it does so rhetorically, by way of anecdote. Also problematic is the sometime slipperiness of what the Acemoglu and Robinson mean by inclusive and extractive institutions, particularly given the work’s broad time frame; institutions that were inclusive in the context of the Glorious Revolution are, in relative terms, extractive as compared to modern Western democratic structures. Although the authors likely intended that inclusive and extractive be considered in gradations, their use of the terms as quasi-absolute adjectives sometimes makes their examples seem like anachronistic judgments. Finally, there is China, something of a fly in the ointment for the pair at a theoretical level. As mentioned above, Acemoglu and Robinson characterize China’s extraordinary growth as founded on fundamentally extractive institutions, and therefore as unsustainable; at the same time, their account doesn’t fully explain how exactly those extractive institutions worked to produce such atypical growth. As to whether China’s growth will eventually collapse, the verdict will likely be out for some time. Until then, perhaps the weight and force of the authors’ remarkable argument ought to spare them that criticism.

Finishing Why Nations Fail is satisfyingly final; the book is as exhausting as it is exhaustive. Were the authors’ arguments less thorough, it would be tempting to convict Acemoglu and Robinson of grandiosity in their case for a “Theory of Everything” of global inequality. It does, after all, take gumption to dedicate just 25 pages to “Theories That Don’t Work,” as one of the book’s chapter heading labels them. Some reviews have taken such a tack, albeit mildly; judgments on the work range, for the most part, from “great” to “very good, but let’s not get too excited here.” Audacity notwithstanding, Acemoglu and Robinson’s ambition here is entirely welcome, an encouragingly bold attempt to get right to the heart of the thorny questions that wreath discussions of global inequality. That Guns, Germs, and Steel author Jared Diamond, whose geographic account of wealth differences is heavily criticized in the book as exactly one of those errant theories, was willing to provide a nonetheless glowing blurb for Why Nations Fail is testament to just how convincingly the authors make their case for their perspective on political economy. The ideas catch and resonate remarkably, and ought to inform any casual discussion of international inequality. At length and in depth, Why Nations Fail is a book worth reading.

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Economics Books

Why nations fail, by daron acemoglu and james robinson, recommendations from our site.

“In terms of understanding this top inequality, I mentioned the possibility that it might be about politics. How should we think about politics? What are the levers of politics? For that we need a conceptual framework and that’s what this book tries to provide. It’s co-authored with my long-term collaborator and friend Jim Robinson – and it’s not about US or UK or Canadian inequality. It runs through several thousand years of history, and tries to explain how societies work and why, often, they fail to generate prosperity for their citizens. It’s a very political story.” Read more...

The best books on Inequality

Daron Acemoglu , Economist

“The key to this book is really all in an early example in the text, where they cite the small town of Nogales on the Arizona-Mexico border. The border basically goes through the middle of the town: you can drive a cigarette paper through the differences between the people on the two sides of the border. They’re from similar families, they’re related, they have shared history and so on, but one of them is in North America, and the other is in Mexico. There are visible and quite stark contrasts in the standards of living and prosperity of people who live either side of the border. The question they ask is, how did this happen? This leads them to an issue which crops up in Ian Morris’s book as well, and I think is an absolutely essential factor to look at when we try to understand relative speeds and levels of economic development, which is the role of inclusive institutions.” Read more...

The best books on Emerging Markets

George Magnus , Economist

“ Why Nations Fail is by two of my favourite economists, two very close friends and co-authors of mine, Daron Acemoglu and James Robinson. They’re tackling a subject that I’ve worked on with them, and they do a great job of bringing it to life and making it vivid. Why Nations Fail is one of those books that stretches your mind and gives you all these examples and connections between them, so that you come away from it saying, “Wow. I didn’t know that.” It’s really, really interesting.” Read more...

The best books on Why Economic History Matters

Simon Johnson , Economist

Other books by Daron Acemoglu and James Robinson

The narrow corridor: states, societies, and the fate of liberty by daron acemoglu and james robinson, economic origins of dictatorship and democracy by daron acemoglu & daron acemoglu and james robinson, our most recommended books, the big short: inside the doomsday machine by michael lewis, a monetary history of the united states, 1867-1960 by anna schwartz & milton friedman, the wealth and poverty of nations by david s landes, this time is different by carmen reinhart & kenneth rogoff, the worldly philosophers by robert l heilbroner, the passions and the interests by albert hirschman.

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WHY NATIONS FAIL

The origins of power, prosperity, and poverty.

by Daron Acemoglu and James Robinson ‧ RELEASE DATE: March 20, 2012

For economics and political-science students, surely, but also for the general reader who will appreciate how gracefully the...

Following up on their earlier collaboration ( Economic Origins of Dictatorship and Democracy , 2005), two scholars examine why some nations thrive and others don’t.

Neither geography, nor culture, nor mistaken policies explain the vast differences in prosperity among nations. The reasons for world inequality, write Acemoglu (Economics/MIT) and Robinson (Government/Harvard Univ.), are rooted in politics, in whether nations have developed inclusive political institutions and a sufficiently centralized state to lay the groundwork for economic institutions critical for growth. In turn, these economic institutions give citizens liberty to pursue work that suits their talents, a fairly enforced set of rules and incentives to pursue education and technological innovation. When these conditions are not met, write the authors, when the political and economic institutions are “extractive,” failure surely follows. It matters not if the Tsars or the Bolsheviks governed Russia, if the Qing dynasty or Mao ruled China, if Ferdinand and Isabella or General Franco reigned in Spain—all absolutism is the same, erecting historically predictable barriers to prosperity. The critical distinction between, say, North and South Korea, lies in the vastly different institutional legacies on either side, one open and responsive to the needs and aspirations of society, the other closed with power narrowly distributed for the benefit of a few. In their wide-ranging discussion, Acemoglu and Robinson address big-picture concepts like “critical junctures” in history—the Black Death, the discovery of the Americas, the Glorious Revolution—which disrupt the existing political and economic balance and can abruptly change the trajectory of nations for better or worse. They also offer a series of small but telling stories in support of their thesis: how the wealth of Bill Gates differs from the riches of Carlos Slim, why Queen Elizabeth I rejected a patent for a knitting machine, how the inmates took over the asylum in colonies like Jamestown and New South Wales and why the Ottoman Empire suppressed the printing press.

Pub Date: March 20, 2012

ISBN: 978-0-307-71921-8

Page Count: 544

Publisher: Crown

Review Posted Online: Jan. 23, 2012

Kirkus Reviews Issue: Feb. 1, 2012

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BETWEEN THE WORLD AND ME

Notes on the first 150 years in america.

by Ta-Nehisi Coates ‧ RELEASE DATE: July 8, 2015

This moving, potent testament might have been titled “Black Lives Matter.” Or: “An American Tragedy.”

The powerful story of a father’s past and a son’s future.

Atlantic senior writer Coates ( The Beautiful Struggle: A Father, Two Sons, and an Unlikely Road to Manhood , 2008) offers this eloquent memoir as a letter to his teenage son, bearing witness to his own experiences and conveying passionate hopes for his son’s life. “I am wounded,” he writes. “I am marked by old codes, which shielded me in one world and then chained me in the next.” Coates grew up in the tough neighborhood of West Baltimore, beaten into obedience by his father. “I was a capable boy, intelligent and well-liked,” he remembers, “but powerfully afraid.” His life changed dramatically at Howard University, where his father taught and from which several siblings graduated. Howard, he writes, “had always been one of the most critical gathering posts for black people.” He calls it The Mecca, and its faculty and his fellow students expanded his horizons, helping him to understand “that the black world was its own thing, more than a photo-negative of the people who believe they are white.” Coates refers repeatedly to whites’ insistence on their exclusive racial identity; he realizes now “that nothing so essentialist as race” divides people, but rather “the actual injury done by people intent on naming us, intent on believing that what they have named matters more than anything we could ever actually do.” After he married, the author’s world widened again in New York, and later in Paris, where he finally felt extricated from white America’s exploitative, consumerist dreams. He came to understand that “race” does not fully explain “the breach between the world and me,” yet race exerts a crucial force, and young blacks like his son are vulnerable and endangered by “majoritarian bandits.” Coates desperately wants his son to be able to live “apart from fear—even apart from me.”

Pub Date: July 8, 2015

ISBN: 978-0-8129-9354-7

Page Count: 176

Publisher: Spiegel & Grau

Review Posted Online: May 5, 2015

Kirkus Reviews Issue: July 1, 2015

BIOGRAPHY & MEMOIR | UNITED STATES | HISTORY | CURRENT EVENTS & SOCIAL ISSUES | ETHNICITY & RACE

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WHEN BREATH BECOMES AIR

by Paul Kalanithi ‧ RELEASE DATE: Jan. 19, 2016

A moving meditation on mortality by a gifted writer whose dual perspectives of physician and patient provide a singular...

A neurosurgeon with a passion for literature tragically finds his perfect subject after his diagnosis of terminal lung cancer.

Writing isn’t brain surgery, but it’s rare when someone adept at the latter is also so accomplished at the former. Searching for meaning and purpose in his life, Kalanithi pursued a doctorate in literature and had felt certain that he wouldn’t enter the field of medicine, in which his father and other members of his family excelled. “But I couldn’t let go of the question,” he writes, after realizing that his goals “didn’t quite fit in an English department.” “Where did biology, morality, literature and philosophy intersect?” So he decided to set aside his doctoral dissertation and belatedly prepare for medical school, which “would allow me a chance to find answers that are not in books, to find a different sort of sublime, to forge relationships with the suffering, and to keep following the question of what makes human life meaningful, even in the face of death and decay.” The author’s empathy undoubtedly made him an exceptional doctor, and the precision of his prose—as well as the moral purpose underscoring it—suggests that he could have written a good book on any subject he chose. Part of what makes this book so essential is the fact that it was written under a death sentence following the diagnosis that upended his life, just as he was preparing to end his residency and attract offers at the top of his profession. Kalanithi learned he might have 10 years to live or perhaps five. Should he return to neurosurgery (he could and did), or should he write (he also did)? Should he and his wife have a baby? They did, eight months before he died, which was less than two years after the original diagnosis. “The fact of death is unsettling,” he understates. “Yet there is no other way to live.”

Pub Date: Jan. 19, 2016

ISBN: 978-0-8129-8840-6

Page Count: 248

Publisher: Random House

Review Posted Online: Sept. 29, 2015

Kirkus Reviews Issue: Oct. 15, 2015

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Why Nations Fail: The Origins of Power, Prosperity, and Poverty (Book Review)

Date published:.

The rich world’s troubles and inequalities have been making headlines for some time now. Yet a more important story for human welfare is the persistence of yawning gaps between the world’s haves and have-nots. Adjusted for purchasing power, the average American income is 50 times that of a typical Afghan and 100 times that of a Zimbabwean. Despite two centuries of economic growth, over a billion people remain in dire poverty.

This conundrum demands ambitious answers. In the late 1990s Jared Diamond and David Landes tackled head-on the most vexing questions: why did Europe discover modern economic growth and why is its spread so limited? Now, Daron Acemoglu, an economist at MIT, and James Robinson, professor of government at Harvard, follow in their footsteps with “Why Nations Fail”. They spurn the cultural and geographic stories of their forebears in favour of an approach rooted solely in institutional economics, which studies the impact of political environments on economic outcomes. Neither culture nor geography can explain gaps between neighbouring American and Mexican cities, they argue, to say nothing of disparities between North and South Korea.

They offer instead a striking diagnosis: some governments get it wrong on purpose. Amid weak and accommodating institutions, there is little to discourage a leader from looting. Such environments channel society’s output towards a parasitic elite, discouraging investment and innovation. Extractive institutions are the historical norm. Inclusive institutions protect individual rights and encourage investment and effort. Where inclusive governments emerge, great wealth follows.

Britain, wellspring of the industrial revolution, is the chief proof of this theory. Small medieval differences in the absolutism of English and Spanish monarchs were amplified by historical chance. When European exploration began, Britain’s more constrained crown left trade in the hands of privateers, whereas Spain favoured state control of ocean commerce. The New World’s riches solidified Spanish tyranny but nurtured a merchant elite in Britain. Its members helped to tilt the scales against monarchy in the Glorious Revolution of 1688 and counterbalanced the landed aristocracy, securing pluralism and sowing the seeds of economic growth. Within a system robust enough to tolerate creative destruction, British ingenuity (not so different from French or Chinese inventiveness) was free to flourish.

This fortunate accident was not easily replicated. In Central and South America European explorers found dense populations ripe for plundering. They built suitably exploitative states. Britain’s North American colonies, by contrast, made poor ground for extractive institutions; indigenous populations were too dispersed to enslave. Colonial governors used market incentives to motivate early settlers in Virginia and Massachusetts. Political reforms made the grant of economic rights credible. Where pluralism took root, American industry and wealth bloomed. Where it lapsed, in southern slaveholding colonies, a long period of economic backwardness resulted. A century after the American civil war the segregated South remained poor.

Extractive rules are self-reinforcing. In the Spanish New World, plunder further empowered the elite. Revolution and independence rarely provide escape from this tyranny. New leadership is tempted to retain the benefits of the old system. Inclusive economies, by contrast, encourage innovation and new blood. This destabilises existing industries, keeping economic and political power dispersed.

Failure is the rule. Here, Venice provides a cautionary tale. Upward mobility drove the city-state’s wealth and power. Its innovative commenda , a partnership in which capital-poor sailors and rich Venetians shared the profits from voyages, allowed those of modest background to rise through the ranks. This fluidity threatened established wealth, however. From the late 13th century the ducal council began restricting political and economic rights, banning the commenda and nationalising trade. By 1500, with a stagnant economy and falling population, Venice’s descent from great power was well under way.

Moves towards greater inclusivity are disappointingly rare. The French revolution provides an example, but also demonstrates the authors’ unfortunate habit of ignoring historical detail. Revolution put paid to absolutism and led, after a long and messy struggle, to the creation of an enduring republic. Institutions, in the form of a fledgling merchant class, provided momentum for reform, making the difference between the successful French revolution and failed uprisings elsewhere. But the authors give short shrift to the presence and meaning of Enlightenment ideals. It is difficult to believe this did not matter for the French transition, yet the intellectual climate is left out of the story. History is contingent, the authors apologise, but history is what they hope to explain.

The story of Botswana is also unsatisfying. There, a co-operative effort by tribal leaders secured the protection of the British government against the marauding imperialism of Cecil Rhodes. Despite its considerable diamond wealth, which might have spawned a corrupt and abusive elite, Botswana became a rare success in Africa, assisted by the benevolence of its leaders and by having a tiny population. At times the authors come dangerously close to attributing success to successfulness.

The intuition behind the theory is nonetheless compelling, which makes the scarcity of policy prescriptions frustrating. The book is sceptical of the Chinese model. China’s growth may be rooted in the removal of highly oppressive Maoist institutions, but its communist government remains fundamentally extractive. It may engineer growth by mobilising people and resources from low-productivity activities, like subsistence agriculture, toward industry. But without political reform and the possibility of creative destruction, growth will grind to a halt.

Rich countries determined to nudge along the process of institutional development should recognise their limitations, the authors reckon. The point is well taken. It is hard to ignore the role of European expansion in the creation of the underdeveloped world’s extractive institutions which, in self-perpetuating fashion, continue to constrain reform and development. Evidence nonetheless hints that contagious ideals, propitious leadership and external pressure matter. The promise of European Union membership encouraged institutional reform in central and eastern Europe. America eventually eradicated extractive southern institutions and placed the South on a path toward economic convergence. There is no quick fix for institutional weakness, only the possibility that steady encouragement and chance will bring about progress.

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Book review: why nations fail.

• Marianne Hii
• Katrina Zhang
• Marianne Hii , Philosophy, Logic and Scientific Method, London School of Economics, United Kingdom
• Katrina Zhang , Philosophy, Logic and Scientific Method, London School of Economics, United Kingdom
• Page/Article: 71-77
• Published on 11 Aug 2021

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Why Nations Fail: The Origins of Power, Prosperity, and Poverty Audio CD – Unabridged, March 20, 2012

• Language English
• Publisher Random House Audio
• Publication date March 20, 2012
• Dimensions 5.07 x 1.62 x 5.85 inches
• ISBN-10 0307987450
• ISBN-13 978-0307987457
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• Publisher ‏ : ‎ Random House Audio; Unabridged edition (March 20, 2012)
• Language ‏ : ‎ English
• ISBN-10 ‏ : ‎ 0307987450
• ISBN-13 ‏ : ‎ 978-0307987457
• Item Weight ‏ : ‎ 14 ounces
• Dimensions ‏ : ‎ 5.07 x 1.62 x 5.85 inches
• #4,900 in Political Economy
• #7,956 in Economic Conditions (Books)
• #8,537 in Economic History (Books)

About the author

James a. robinson.

James A. Robinson, a political scientist and an economist, is one of 8 current University Professors at University of Chicago. Focused on Latin America and Africa, he is currently conducting research in Bolivia, the Democratic Republic of the Congo, Sierra Leone, Haiti and in Colombia where he has taught for many years during the summer at the University of the Andes in Bogotá.

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Why Nations Fail

The Origins of Power, Prosperity, and Poverty

Daron Acemoglu, James A. Robinson | 4.23 | 31,231 ratings and reviews

Ranked #1 in Economic History , Ranked #1 in Development Economics — see more rankings .

Reviews and Recommendations

We've comprehensively compiled reviews of Why Nations Fail from the world's leading experts.

Mark Zuckerberg Founder/Facebook My next book for A Year of Books is Why Nations Fail by Daron Acemoğlu and James A. Robinson. This book explores the different kinds of social institutions and incentives that nations have applied to encourage prosperity, economic development and elimination of poverty. This is a good complement to our last book, Portfolios of the Poor, which focused on how people live in poverty. This one discusses why poverty exists and how to reduce it. (Source)

Bill Gates CEO/Microsoft "I read two books that raise big, interesting questions about social change and technological progress. I’m planning to write longer reviews of each of these books, but let me flag them for you now. One is Why Nations Fail: The Origins of Power, Prosperity, and Poverty by Daron Acemoglu and James A. Robinson.The topic of this book is why some countries have prospered and created great living conditions for their citizens while others have not. This is an important topic, which I care a lot about. The book makes an appealing argument that economic development depends on political institutions... (Source)

Daron Acemoglu In terms of understanding this top inequality, I mentioned the possibility that it might be about politics. How should we think about politics? What are the levers of politics? For that we need a conceptual framework and that’s what this book tries to provide. It’s co-authored with my long-term collaborator and friend Jim Robinson – and it’s not about US or UK or Canadian inequality. It runs through several thousand years of history, and tries to explain how societies work and why, often, they fail to generate prosperity for their citizens. It’s a very political story. (Source)

Simon Johnson It’s one of those books that stretches your mind, so that you come away from it saying, Wow. I didn’t know that. (Source)

Tim Modise Great book, very perceptive. I recommend it to anyone who is open-minded and keen to help build a successful nation that provides support and is home to aspirant youths. 🇿🇦 https://t.co/JVODcQvUxX (Source)

Trevor Ncube @chapendamat1 Why Nations Fail is an amazing book. Enjoy (Source)

George Magnus The role of institutions is really important for societal development. (Source)

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Why Nations Fail is ranked in the following categories:

• #42 in Business Economics
• #38 in Capitalism
• #3 in China History
• #27 in Current Affairs
• #7 in Democracy
• #12 in Diplomacy
• #8 in Economics
• #34 in Geography
• #11 in International Business
• #6 in International Relations
• #2 in Macroeconomics
• #3 in Political Science
• #28 in Political Theory
• #15 in Politics
• #26 in Poverty
• #28 in Power
• #23 in Public
• #91 in Social
• #30 in Social Sciences
• #79 in Sociology
• #74 in Thought
• #20 in World
• #35 in World History

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August 26th, 2012

Book review: why nations fail: the origins of power, prosperity, and poverty.

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Estimated reading time: 5 minutes

The scholarly work of Daron Acemoglu and James Robinson is already widely known among economic historians, economists and political scientists. In Why Nations Fail Acemoglu and Robinson seek to convey to a much broader audience the results of many years’ path-breaking research on the historical role of institutions – defined as “the rules influencing how the economy works, and the incentives that motivate people” – and their impact (p .73). The result is a highly readable work of enormous geographical and chronological range that addresses one of the most pressing issues of the contemporary world. With much of its content consisting of good, old-fashioned historical narrative – something I did not quite expect – this book will without doubt appeal to a broad readership.

The basic case that the authors seek to make in the book is a simple one, namely that nations with extractive political and economic institutions are likely to be poor, whereas those with inclusive institutions are likely to be rich. Politics is paramount: the existence of centralised and pluralistic political institutions is the key to the sustained existence of inclusive economic institutions. While a degree of economic growth may be possible under extractive institutions, such growth is not sustainable, as shown by the cases of, for example, the later Roman Empire or the Soviet Union. Once a nation has started to move towards inclusive institutions a positive feedback loop may help to keep them in place, but extractive institutions are also sustained by path dependence, with those in power fearful of the “creative destruction” generated by change, producing a vicious circle. The argument put forward is not, however, one of institutional determinism. Small institutional differences, and what the authors refer to as “institutional drift” over time can interact with “critical junctures” and historical contingency to produce a change in path. By analysing such institutional evolution in its historical setting, Acemoglu and Robinson argue that we can better understand why some countries are rich and others poor, how that pattern may have changed over time, and even how the problem of global inequality might be addressed in the future.

Striking historical examples are used to demonstrate the key importance of institutions, and to reject the explanatory power of geography and culture. The two Koreas, united until the late 1940s, and sharing a common geography and culture, have since diverged dramatically in institutional and wealth terms. Exploitative Spanish imperialists in search of plunder put Latin America on a path of extractive and unproductive institutions, while the same institutions failed to work in North America, allowing the appearance of democracy and institutions more conducive to growth. Case proved? Well, up to a point. It is certainly hard to dispute the claim that “institutions matter”, and the authors themselves have played a major role in demonstrating the significance of colonial institutions, for example, in shaping the economic development of colonised countries, and in the primacy of political institutions in shaping economic ones. Few academic readers will take issue with the basic message of this important book. What many readers will be less comfortable with, perhaps, is the oversimplification inevitably associated with almost any monocausal explanation, and the wholesale rejection of other competing explanations of historical development. To be fair, the authors in the conclusion acknowledge the limitations of their approach, but their exaggerated depiction of the determinism associated with geographical or cultural explanations, for example, prevents them from acknowledging the subtle historical interplay between geographical factors, culture (however that might be defined) and institutions, whether extractive or inclusive. For example, the authors’ own account shows that a major reason why the extractive institutions of the Spanish could not be copied in North America was the very absence of riches (gold and silver) that could be plundered. Acemoglu and Robinson have also in the past been criticised for “compressing” history, and their theory raises major questions about what time periods matter in institutional terms. The extractive Mayan Empire, for example, continued to generate wealth over more than six centuries.

Acemoglu and Robinson are careful to emphasize the importance of historical contingency in their interpretation; institutional dynamics respond to critical junctures and new opportunities. In that context one of the things that comes out of their account is the recurrent importance of chance and luck, and also the importance of individual actors, somewhat reminiscent of the ‘great men’ interpretations of history so popular in the 19 th and early 20 th centuries. Botswana, for example, was profoundly fortunate to have as its leader Seretse Khama, who sustained the move towards more inclusive institutions, unlike Robert Mugabe in Zimbabwe or Mobutu in the Congo. Their historical account is thus populated with a rich cast of heroes and villains of all shades. Not surprisingly for those familiar with their work, imperialism is one of the main culprits, but far from the only one. These, and other somewhat black and white depictions, will do much to sell Why Nations Fail , but they will also contribute to the book’s arousing strong views, particularly in its absence of nuancing. There is therefore much to commend about this book, and much to take issue with, but even its critics will concede that it is based on serious scholarship, will do much to stimulate debate, and is a very good read.

———————————————————————-

Janet Hunter is Saji Professor of Economic History at LSE. She teaches comparative and global economic history, and has published extensively on the economic development of modern Japan, with special reference to the development of the female labour market, the history of communications, and the evolution of Anglo-Japanese economic relations. She is currently working on the economic impact of disasters in 20 th century Japan. Read more reviews by Janet.

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Why Nations Fail

Daron acemoglu and james a. robinson, ask litcharts ai: the answer to your questions.

Welcome to the LitCharts study guide on Daron Acemoglu and James A. Robinson's Why Nations Fail . Created by the original team behind SparkNotes, LitCharts are the world's best literature guides.

Why Nations Fail: Introduction

Why nations fail: plot summary, why nations fail: detailed summary & analysis, why nations fail: themes, why nations fail: quotes, why nations fail: characters, why nations fail: terms, why nations fail: symbols, why nations fail: theme wheel, brief biography of daron acemoglu and james a. robinson.

Historical Context of Why Nations Fail

Other books related to why nations fail.

• Full Title: Why Nations Fail: The Origins of Power, Prosperity, and Poverty
• When Written: 1997–2012
• Where Written: Cambridge, Massachusetts
• When Published: March 2012
• Literary Period: Contemporary
• Genre: Development Economics, Political Economy, Economic History, Comparative Politics
• Setting: Various societies around the world from roughly 10,000 BC to 2011
• Antagonist: Extractive political and economic institutions
• Point of View: First Person

Extra Credit for Why Nations Fail

Reviews and Rebuttals. Why Nations Fail received a wide range of reviews in the academic and popular media—including many from the scholars whose research Acemoglu and Robinson criticize in the book. Jared Diamond argued that Acemoglu and Robinson were partially right, but he thought they were wrong to dismiss geography’s role in inequality. Jeffrey Sachs and Bill Gates were extremely critical of the book.

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Book Review of Why Nations Fail

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At its very essence, the central theme of human history seems to be a story of power: the relational dynamic between those who have it and those who don’t. The authors of WNF do a phenomenal job of weaving the disciplines of history, economics and political science to posit a new framework of social science in the backdrop of the story of power. This paper suggests a way to deepen the inquiry, by including the implements of the new fields of complexity sciences and integral theory, so that the emergent framework can be used to inform global decision-making on key issues that impact human welfare.

Hazrat Ullah Khan

Hazrat Ullah

Earlier last month I started reading Daron Acemoglu and James Robinson's co-authored book Why Nations Fail. It is a thoroughly well written and comprehensive piece. The book is a combination of politics, economics, history and philosophy. It encompasses all these facets of human life. It not just address the question why some nations get rich and others poor, but also presents a vivid solution to it. The book also shads light on different aspects of nations' development and its successes and failures.

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Authors set themselves an ultimate vision in Why Nations Fail: to identify the underlying motivations why certain countries are wealthy and thriving when others are impoverished and destined to fail repeatedly. And to explain that some countries are wealthy while others are struggling, as well as others who wish to eliminate inequity and corruption. The Authors spell out a liked-to-think theory in fifteen chapters that have sparked a vibrant debate among the most prominent economists, scholars, and political theorists of the 21 st century. Rich nations are prosperous due to "inclusive economic institutions", which are essentially a mix of government and free market in which: • By ensuring private property rights and applying contract law, the government tends to encourage citizens to spend and grow. • Rather than being monopolized by a significant fraction, the state is governed by its people. Equally importantly, there must be a democratic principle at stake, in which governments create institutions and policies that favor most citizens rather than only the wealthiest. • The government must therefore retain a monopoly on crime. • Through offering education and infrastructure, the state facilitates investment and development.

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