Why Nations Fail By Daron Acemoglu And James Robinson

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Why Nations Fail Book Report In Why Nations Fail, Daron Acemoglu and James Robinson show that economic development is about more than just economics. Through a wide variety of natural experiments ranging from Latin America, to Sub Saharan Africa, to East Asia, they argue that it is institutions, both political and economic, that differentiate a country’s economic success. Specifically, they separate institutions into inclusive and extractive. Inclusive political institutions engage the entire population, while extractive political institutions are ruled by an elite minority. Similarly, inclusive economic institutions promote property rights and competitive markets, while extractive economic institutions create monopolies and funnel wealth to the elite minority. The novel part of their thesis is the idea in order to have sustainable inclusive economic institutions, a country must first have inclusive political institutions. It is only when a country has inclusive economic and political…show more content…
Daron Acemoglu and James Robinson do an incredible job of simplifying a complicated topic for a general audience. They address most major counterarguments and provide in-depth and convincing stories from history that support the importance of inclusive institutions. However, when you simplify a topic, it is much more difficult to make rigorous arguments. Additionally, Acemoglu and Robinson’s framework for analyzing development fails to account for India and China. Therefore, it was successful in analyzing past economic development, but largely fails to predict future development. Nevertheless, it is indisputable that inclusive institutions are much more beneficial for an entire population than extractive institutions. Researchers and advocates just need to remember to look at the entire economic picture of a country, instead of only one indicator when making decisions about economic
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