Why nations fail

Conjure a country rich in resources with several distinct groups that rely on trade with each other. Those on the coast would trade aquaculture products for resources produced by those inland, perhaps timber or stone. Given sufficient time, the economies of the separate groups would become intertwined, interdependent. It would be in the interest of any political authority to serve both their immediate group and those they trade with, as otherwise the valuable resources your group has come to rely on would be at risk.

Inclusive institutions are far more likely to emerge under this scenario. As with the cultural example, intranational geographic isolation makes for a more suspicious peoples who are unwilling to centralise power. However, there is also the issue of geographic factors on the international scale. The prevalence of domesticable livestock, arable land, and plants that are able to be harvested make critical differences in the productivity of a people.

For example, the lack of horse, cattle, sheep, wheat, and barley in your country, no matter how altruistic and centralised your political systems are, will leave you at a disadvantage compared to a nation that has access to these resources.

Higher productivity leads to more time dedicated to other pursuits inventing, writing, thinking, creating permanent settlements.

The importance of the absence of these resources is unduly discounted in the book. Finally comes what can be deduced from the discussion, even if unintended. The authors have attempted to explain historically why nations have failed. In their thesis they rightly dismiss the factors of culture and ignorance, and discount the importance of trade interdependence and geography.

The modern world, however, is far less constrained by these limitations — livestock and crops can be grown around the world, thanks to irrigation, people are able to travel to any number of nations, and global trade is indispensably intertwined.

This largely removes these limitations. So although Acemoglu and Robinson have attempted to explain the historical reasons nations have failed in the past, they have paradoxically provided both a predictive paper on why nations will fail in the future and a blueprint for prosperity for contemporary policy practitioners who are conversant with development theory. In a sentence, it is those countries that establish inclusive political and economic institutions that will succeed.

View the discussion thread. Books for self-isolation: Revisiting Why Nations Fail. Scott Robinson. Sign up. Log out. My profile and settings. Please complete your account verification. Resend verification email.

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On-screen comment notifications. Select interests to personalize your profile and experience on Gates Notes. Click the link below to begin the account deactivation process. Deactivate account. Inclusive vs Extractive. February 26, Read this next. Still, at a basic level, explaining economic development while leaving out one-third of humanity from it is not entirely satisfying.

Second, Acemoglu and Robinson can contend that theirs is a claim about the medium to long run. These horizons are never clearly specified but would rule out criticisms based on relationships observed for only, say, 20 to 30 years.

Reproducing the figure for , for example, would show China near the line although India would still be far from it. The Chinese anomaly is a result of the past 30 years of astonishingly rapid growth.

Wait for another 20 years, Acemoglu and Robinson might plead, and the anomalies in the figure will fade away or at least move in the direction predicted in their book. This defense is more problematic. Suppose that we were to re-visit the book in What would have to happen to China and India for them to be consistent with the relationship predicted by Acemoglu and Robinson?

India in 20 years would have to slide into authoritarian chaos and become the equivalent of countries such as Venezuela today politically, or it would have to boom to become the equivalent of countries such as China in terms of standards of living. Conversely, China would either have to become a near-Jeffersonian democracy or suffer a dramatic collapse in output that is, post negative growth. None of these four outcomes is impossible, but none is likely either.

But one could make an even stronger critique of the book. Of course, there are answers but the point is that they would have to be different from, and even orthogonal to, the central thesis of Why Nations Fail.