Why Nations Fail: The Origins of Power, Prosperity, and Poverty
By Daron Acemoglu and James Robinson
♦ Nations fail today because their extractive economic institutions do not create the incentives needed for people to save, invest, and innovate. — P.372
♦ Even if Chinese economic institutions are incomparably more inclusive today than three decades ago, the Chinese experience is an example of growth under extractive political institutions. Despite the recent emphasis in China on innovation and technology, Chinese growth is based on the adoption of existing technologies, not creative destruction.— P.439
Why Nations Fails: this book is exceptionally fun to read and full of interesting historical examples and provocative ideas. The basic theme of the book is that what matters most in why some nations fail – and others succeed, for the book is as much about success as failure – are not – as earlier authors have argued – economic policies, geography, culture, or value systems – but rather institutions, more precisely the political institutions that determine economic institutions. Acemoglu and Robinson theorize that political institutions can be divided into two kinds – “extractive” institutions in which a “small” group of individuals do their best to exploit – in the sense of Marx – the rest of the population, and “inclusive” institutions in which “many” people are included in the process of governing hence the exploitation process is either attenuated or absent.
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