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The bestseller Why Nations Fail: The Origins of Power, Prosperity, and Poverty by Daron Acemoglu and James A. Robinson was first published in 2012 and has since triggered wide discussion regarding its main subject as well as the general issue of countries’ progresses and failures (Acemoglu and Robinson). Generally addressing the importance of institutional state-building, the book presents an enormously valuable insight into the history of countries’ development all over the world. Although focusing primarily on domestic reasons for the states’ economic and political growth and decline, the work is an outstanding and powerful instrument that may help to reveal some essential truths as to why some nations prosper, while others fail.

First of all, it is necessary to mention that both authors have exceptional and profound research experience in the areas of political sciences, economy, and history. Daron Acemoglu currently works a professor of Economics at the Massachusetts Institute of Technology and he was awarded for his groundbreaking accomplishments and outstanding contribution to economic knowledge the John Bates Clark Medal in 2005. James A. Robinson is well known for being an expert on Africa and Latin America, as well as teaching political science at Harvard University (“Author Bios”).

Although this book can be of great interest for everyone concerned with the issues of economic development of the world and the historical implications of countries’ adopting different political as well as economic institutions, Why Nations Fail is a must-read for the government top officials and strategy planners who aim to run their countries in an effective and successful manner.

Moreover, the authors give valuable insights into history of economic and political institutions in various countries since Neolithic revolution. For that reason, it can be enormously useful for history, political science, or economy students who strive to obtain profound and interdisciplinary understanding of progress and decline reasons in different parts of the globe.

Why Nations Fail generally brings the discussion on what can be defined as interdependence of political and economic institutions to a new level (Acemoglu and Robinson). The authors claim that their profound research of economic development of the world has helped them to reveal that the main underpinning reason for a country’s prosperity or decline lays in the nature of its institutions.

Acemoglu and Robinson state that “inclusive” political institutions provide a stimulus for the development and advancement of inclusive economic institutions. The first concept is described as a political system, in which no group exercises full political control in the country, the power is distributed more or less evenly, and thus political rights of people are well-protected. On the other hand, there are “extractive” political institutions, which means a few individuals hold political power in their hands, and they do not allow other groups to obtain it. In this case, oftentimes these political elites establish “extractive” economic institutions aimed at maintaining the elites’ exclusive possession of economic resources and increasing incomes. To put it simply, when exercising a considerable level of political freedom and some political power, one group will never let another group endanger its economic rights in any way as it will have necessary leverages of political influence.

Nevertheless, inclusive political institutions are not the only precondition for an effective economic development of a country, as authors argue. Giving the example of Somalia, where the political power is widely dispersed among various groupings, the authors indicate one more critical condition for prosperity that is a centralization of power. In Weber’s terms, it means that the government has monopoly on violence and thus can maintain order within its borders.

At the beginning of their work, Acemoglu and Robinson also describe several theories that were dominating in explaining the reasons of why countries develop differently. They focus on cultural and geographical determinism, as well as leaders’ ignorance theories, showing why explanative power of such models is weak. In addition, as examples, authors mention the illustrative case of North Korea and South Korea, which had the same cultural and geographical conditions, yet at a critical point in the middle of 20th century their political and economic development paths diverged.

Although at some point in time authoritarian leaders may adopt an economic development model, usually their actions are grounded on the desire to maximize their personal incomes, not the population’s welfare. In addition, as the authors state, some economic progress can take place in a country with extractive political institutions (for example, the USSR during the 1970s). Nevertheless, under authoritarianism, people have neither the opportunities nor the motivation to be involved in entrepreneurship. The key obstacle here is authorities’ fear in the face of “creative destruction” usually brought by economic progress, which can push for power reshuffling and its redistribution among some new players, who obtained economic success. Thus, in such circumstances, old elites are not interested in economic innovations that can directly endanger their political power.

It is important to mention that this dependence between political and economic institutions is not linear which means that this process of establishing inclusive political institutions can be easily reversed. In their book, the authors give examples from the history of the Republic of Venice. Developing for a long period as a rather inclusive state both politically and economically, at some point in time the circle of rulers began to restrain other groups from “entering” political institutions as well as minimized their market access opportunities. As a result, it fostered the situation when economic resources and political power are concentrated in the hands of the few that was a sign of the development of extractive institutions and the beginning of the republic’s decline.

Comparing the book to other works on this subject, it would be useful to mention Guns, Germs, and Steel by American ecologist, geographer, and biologist Jared Diamond. In contrast to Acemoglu and Robinson, in his book Diamond explains the reasons for nation’s development in geographical terms. He states that Eurasia was the most developed continent not because of genetic differences or other physical attributes of the people living there, but due to certain environmental conditions (Diamond). The presence of rich natural resources, in its turn, significantly contributed to agricultural development and animals’ domestication. Moreover, later these factors became the defining features that helped some nations conquer other continents and spread their culture and institutions.

Although both books address the same issue of economic development of the world, the authors of these works seem to be the most effective at giving explanations for quite different periods of time and stages of development of human societies. Jared Diamond’s work appears to have considerable explanatory power when focusing on earlier stages of societies, when geographical conditions were defining for countries’ development. However, to my mind, this situation has changed drastically when humans became less dependent on such basic resources as soil, and started to develop industry more than agriculture. In this respect, the book by Acemoglu and Robinson has better prognostic potential, identifying the key obstacles on the way of economically successful nation’s development in contemporary world.

When addressing the issue of the world’s unequal economic development, another outstanding book on this subject that made a considerable impact in its respective field and is still widely known is The Protestant Ethic and the Spirit of Capitalism by the German sociologist, economist, and political scientist Max Weber. In his book, he stated that countries develop differently because of their different religious backgrounds (Weber). Weber claimed that Protestantism is the most “suitable” religion for the emergence of economic progress due to its work ethic, while the others constrain rather than facilitate exercising “capitalist logic”. Although rather influential at the time of its publication, this book was highly criticized, in particular by Acemoglu and Robinson, for its determinism and extremely oversimplified focus on religion as a primary source for a nation’s development.

However, Why Nations Fail has a number of weak sides evident after a thorough examination. First of all, the model proposed by Acemoglu and Robinson neglects the effect of wars on economic and even more on political institutions in countries. Apparently, wars had a huge impact on the emergence of extractive political institutions, as they were more authoritative and gave the opportunity to react more quickly due to consolidation of power. Moreover, the authors disregard the influence of international alliances, NGOs, and other institutions, that exist nowadays, when considering the prospects for countries’ institutional changes today (for example, China).

Despite some weaknesses present in Why Nations Fail, its authors have obviously made an immense impact on the emergence and development of institutionalism models when identifying the reasons for the world’s unequal progress. Their focus on political and economic institutions as primary sources of a country’s growth or failure has good explanative power for a number of reasons. First of all, it has a more universal character than other models and thus it advances the establishment of a common framework of analysis for various parts of the globe. Moreover, this institutionalism model lacks “normative” logic in a good way, which means it is not aimed at making some cultures look great, while downgrading the others since cultural differences are not considered in this book, only institutional ones. Furthermore, another strong side of the work is that the authors give an enormous number of profound examples from history, which only makes the overall picture of research more bright and rich.

To summarize, Why Nations Fail is an outstanding and valuable work that addresses debatable issues of the modern world and offers truly credible explanations. The book also has strong theoretical background and gives a profound historical overview that can be of great interest for everyone concerned with issues of economic and political development of various countries of the globe.

Works Cited

Acemoglu, Daron and James A. Robinson. “Author Bios.” Why Nations Fail, 2012, http://whynationsfail.com/bios/. Accessed 31 October 2017.

Acemoglu, Daron, and James A. Robinson. Why Nations FailThe Origins of Power, Prosperity, and Poverty. Crown Publishing Group, 2012.

Diamond, Jared M. Guns, Germs, and Steel: The Fates of Human Societies. W. W. Norton & Co., 1999.

Weber, _Max. _The Protestant Ethic and the Spirit of Capitalism. Routledge, 2011.

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Author: Alexandra Trevino | Created at: 14.01.2022

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