And Poverty - Why Nations Fail - The Origins of Power

This takes some time to get through but the comprehensive view and thorough presentation are necessary and worth it. It shows the complexity of the issues yet explains the numerous variables simply. It is easy to understand and should be required reading for everyone.

An important book for our time. A careful analysis of the factors that led to success and decay of nations, and their delicate balance. Important to read as we go through the current election cycle. Manageable read for regular folk. Interesting with its good description of history, politics and economics. Contrasts its theory with other theories of successful civilizations. I would love to read reactions to this book and their theory. Who disagrees with it and why?

As plenty of reviewers have posted their opinions about the book or have explained the contents, what I'll do is simply attempt to portray what you're getting into by buying/reading this book.

This book is 30% economic theory and 70% economic/political history. Coming from a background teaching economic theory, I was hoping for more in that regard. This book is heavy in the history of various nations around the world that suffered from institutions which promoted a lack of long-run economic growth.

At 462 pages of main content, it feels that the authors are almost beating the proverbial "dead horse" on their thesis about these extractive political and economic institutions being the cause of poverty worldwide. The chapters are just really separated by slight changes in the focus of what they're trying to focus on with each story of economic success or failure. The thesis is the same throughout. Some stories are good for emphasizing the "critical junctures" that can determine if a nation heads in the extractive or inclusive direction. Other stories are good for showing that extractive institutions breed other extractive institutions. What I'm getting at is that after 462 pages of reading, I feel like I got one good thesis explained a few dozens different ways through a few dozen different stories. If you like world history and some economics, this is a good book for you.

Superb, great narration of our current problems and why we are lagging behind many countries. Our politicians - the populist ones, which are abundant and on both sides of the spectrum and mainly to blame for the reasons we lagged behind and stay in the same level and can not move forward, every economy and political science should have this book as reference material

This book has totally changed my understanding of how I view current events happening in counties across the world. The background history has also given me a better of world history that is not discussed in any of the history books that I have read,

I really liked this book. It provides fresh air to the economic growth debate. Why some countries grow whilst others remain poor; that's something everybody should learn a bit. The author is a brilliant economist. The only flaw of this book, in my opinion, it's the following: the ideas and suggestions are really interesting, but their exposition is way repetitive. It's not such a big issue, but take it into account; it's worthwhile reading the whole book.

The authors are noted academic economists but "Why Nations Fail: The Origins of Power, Prosperity, and Poverty" is very well written and avoids mathematical/technical explanations in the text (although the text is supported by reference to technical materials). The book convincingly makes the case for a strong postivie correlation between democratic political institutions and the rule of law and economic development, citing many historical cases. My only (minor) reservation about the book is that it does not at least briefly discuss the importance of other factors important to economic development such as geography, natural resources, climate, disease, literacy, etc.

Every legislator should be required to read this book. And frankly, so should every citizen. We need to understand why we have been rich while others have been poor, and where our path is taking us. We will recognize our current selves in the description of extractive societies, and be sobered by what happens to them.

Good book for those who are terribly interested in the topic. I read it for a discussion group and found it well written and interesting, but not compelling - out of my range of interest. So...for those who are into the topic, I recommend it; those who are marginally interested, well, decide for yourself. But it is well documented and well written, for all that.

Dense and informative, it takes a while to navigate and digest this book, but it is worth the work. The premise is sound and it is supported by compelling historical evidence. I found this book enlightening and thought provoking about the current economic-political climate in the U.S. and abroad. Worth a read if you want to investigate more about how the world works.

This book is maybe an oversimplified answer to the question of Why Nations Fail but the best book written on the subject so far. Also these Acemoglu and Robinson clearly state this is an oversimplification: "Our choice was motivated not by a naïve belief that such a theory could explain everything, but by the belief that a theory should enable us to focus on the parallels, sometimes at the expense of abstracting from many interesting details".

I think Acemoglu and Robinson are right when claiming inclusive institutions is what explains the success of the Nations and extractive institutions explain the fail. Not 100% ofcourse.

I admit some details irritates me a lot.

1. Emphasizing over and over again the importance of centralization as a necessary (even if ofcourse not sufficient) condition for the arise of inclusive institutions they forget totally to tell about the bottom-up spontaneous nature of the institutional change in the Chinese country side which in reality was the first step towards a Chinese market economy. John McMillanin Reinventing the Bazaar: A Natural History of Markets tells:

"China's agriculture switched from collective to individual production in the late 1970s. The marketization of agriculture lifted hundreds of millions of Chinese out of dire poverty. It was the biggest antipoverty program the world has ever seen....

Desperation had hit the farmers of Xiaogang village in China's Anhui province by 1978. The commune on which they worked collectively was dysfunctional. Known as the granary of China, Anhui contains some of the nation's most fertile land. But Xiaogang's twenty families were not producing enough rice to feed themselves. They had been reduced to relying on begging in other regions. In years of unfavorable weather they starved. Fearful of being arrested, the villagers met secretly and agreed to parcel out the communal land among themselves. They made a three-part resolution. First, as they were flouting government policy, the contracting of land to individual households was to be kept strictly secret; it was not to be divulged to any outsider. Second, they would continue to deliver the stipulated amount of rice taxes to the state. Third, if any of them were jailed, the others would raise their children until they were eighteen years old. They signed the pact with their thumbprints. A rapid turnaround followed. The farmers of Xiaogang immediately became more productive. "Now is different from the past," one said. "We work for ourselves." Working their own plots of land, they could see a direct link between their effort and their rewards. Any of their output beyond what they owed the state they now retained to use for themselves or to sell. The amount of land planted in rice nearly doubled in one year, and the village began producing a rice surplus. As a farmer said, "You can't be lazy when you work for your family and yourself...

Provincial Communist Party officials visited the village and gave their blessings. Then a high-level Beijing official traveled to Xiaogang and neighboring villages to study the effects of individual farming. His report, which concluded that individual farming increased output and improved living standards, became influential when it was circulated among the national leaders. At a Communist Party conference in 1982, four years after the Xiaogang villagers' meeting, China's paramount leader Deng Xiaoping endorsed the reforms. In 1983 the central government formally proclaimed individual farming to be consistent with the socialist economy and therefore permissible. By 1984, just six years after Xiaogang started the movement, there were no communes left....)"

2. A second issue which irritates me is when they tell us about the success story of Botswana they again forget to tell about the other side of the story:

The national product of Botswana has - much thanks to the inclusive institutions - reached the level of some East European success countries like Estonia, but the Life Expectancy has collapsed. The Life expectancy is as low as 35 years according to World Bank figures - having been 64 years only in 1990.

This double development is nicely explained by the racialist Lynn-Vanhanen theory. Vanhanen and Lynn claim: National IQ explains some 50% of variation in GDP between nations and also variation in many other measures of Quality of Life. But for Life Expectancy National IQ explains even more than 50%: According to "IQ and Global Inequality" by Lynn and Vanhanen National IQ explains 60-70 % of the variation in Life Expectancy between nations. London School of Economics sociologist Satori Kanazawa has shown controlling of IQ makes factors like GDP to explain nothing of the variance in Life Expectancy.

Thus even if inclusive institutions make Botswana to prosper, Life Expetancy is low, fully in accordance with Lynn and Vanhanen. The ultimate explanation for low Life-expectancy is the low National IQ. The proximate explanation is AIDS.

But what then explains the high rates of AIDS in Africa? According to World Health Organisation it is very much probable HIV will never reach high rates outside Africa. For many years WHO speculated on a risk for AIDS epidemy in India, Russia or what ever country. The risk was never materialised. And now even WHO admits the risk will probably never materialise. How then does WHO explain the lack of AIDS epidemy outside Africa ? The explanation WHO is giving is the high rate of parallel sexual relationships in Africa - high compared to other geographical areas. In other words married African men and women are frequently having unprotected extramarital sex.

Low control of sex drive and disability to use condoms by low IQ people is probably the mechanism how low IQ is causing the low Life-Expectancy in case of Botswana.

This book explores why some nations fail and others do not. The authors lay out their thesis early on (Pages 3-4): "Countries such as Great Britain and the United States became rich because their citizens overthrew the elites who controlled power and created a society where political rights were much more broadly distributed, where the government was accountable and responsive to citizens, and where the great mass of people could take advantage of economic opportunities."

In the process of addressing their thesis, the authors also look critically at some competing theories--geography, culture, ignorance. One comparison that serves the authors well is the fates of North Korea and South Korea, and why their well-being has diverged so widely.

The authors provide a wide ranging analysis, including a critique of managed economies and a question about the staying power of high fliers such as China.

One question that occurs to me, though, is how certain examples of increasing economic differences and, in the United States, Court decisions that enhance the power of economic powers might play out. Are there potential problems facing some of the democracies with increasing inequality? Only time will tell, but it is a question that arises when looking at the data.

All in all, an interesting and important work.

A really fascinating read, which I would recommend to anyone who is interested in exploring the reasons why things are the way they are in the world today - it also made me think about the workings of some of the organisations I have worked with too. It is a bit long, and sometimes a little repetitive, but it is well and truly worth the effort for the insights it affords into the interplay of economics and politics.

THE AUTHORS offer a unique and interesting theory why nations, small and large, prosper or not. It's difficult to fin a weakness in this theory because they have researched carefully and provided data on countries from virtualy every continent.in the world. It had to be a massive project to accumulate and process this volume of information. I found no weaknesses in their arguments,

This book reviews the economic history of different cultures, cities and states to support the authors' thesis that economic mobility within society is the key element to develop economic power. Nations that have closed socio-economic tiers fail to develop their economic potential or even worse, fall back to poverty when their society groups become inmovible or closed.

Excellent book. A clear and concise explanation about the reasons different countries have different political and economic regimes. Geography, culture, religion or race are not determinant, but the interests of the elits they have and the pressures they get from the people of their respective countries.
Democracy is not a political system you can impose from outside unless political powers are ready to occupy the country and stay for a long time which can be counterproductive in the long run.

Take Friedman's Capitalism and Freedom and place it in a macro context and you have the essence of Why Nations Fail. The authors debunk popular theories of development and modernization with example after example. Sometimes repetitive, the book still remains a powerful argument against what has been tried and failed over much of history.

Excellent! Whether this theory of national wealth and poverty covers all cases or not, it's a sound theory, well presented. Better than many others, such as the geographical determinism of Guns, Germs, and Steel.

Well written, holds your interest and makes you think while reading. What parts of failure are we embracing? Are we moving in the right direction as a country? What other variables predict the outcome for a nation? These and many more questions will challange you while you read this great political work

Grand theories of history are fascinating. The vicious bond between extractive economic institutions and extractive political institutions and the way out to create modern states with the necessary checks and balances and freedoms. It set the glorious revolution of 1688 in a new light for me, being the first important step away from absolutism and towards universal rights and egalitarian laws, and setting the stage for the industrial revolution. Seems to me the authors too easily makes away with other grand theories, like the ones Jared Diamond proposes in "Guns, germs and steel", to me they seem to be able to co-exist comfortably.

One of the best, most comprehensive books I've read on this subject. A very clear and comprehensive review of historical and political factors that lead to the divide between rich and poor nations that we have today. A must read for everyone who is curious about the underlying reasons behind the origins of wealth and poverty.

This book answers an intriguing question with a persuasive concept. Why are nations so strikingly unequal in their economic development? My own preferences had mainly been Max Weber's cultural hypothesis (heck, who can beat European cultural ascension?) and also the climate theory, but the authors convinced me that I was sadly mistaken. Inclusive economic and political conditions together with political centralization will outstrip any other socio-economic system. Extractive institutions, as they call them, will cause stagnation and backwardness, and even where they have been temporarily successful as in Russia and China, they will eventually stagger. The fear of "creative destruction" has sealed the economic fate of many countries which would have otherwise been in perfect shape to succeed. Well conceived were the unforeseen events called "critical junctures" (e.g. the black death of 1347) and "contingencies", such as the destruction of the Spanish Armada, that shape history. For the historian of particular interest is their elevation of England's Glorious Revolution of 1688 to a pivotal turn-around from authoritarian to pluralistic regimes and as the birthplace of the stupendous ascent of industrial and technological progress during the subsequent three centuries. Granted, an editor would have been helpful, as one reviewer suggested, but just the same I laud both authors for the brilliance of their concept and the wide ranging evidence supporting it.

Why Nations Fail

An excellent book similar in focus to Niall Ferguson's "Civilization: The West and the Rest", and similar in outlook as well.

The main essential elements that are necessary to make a nation successful, in the view of the authors, are a sufficiently centralized government to insure personal security, individual property rights, and rule of universally equally applied law.
They think that governmental institutions should be what they call inclusive rather than extractive, having a broad pluralistic base rather than using the population as a source of labor, taxes or other rent-seeking behavior that benefits a minority at the expense of the general population.

Schumpeter's concept of creative destruction is also firmly embraced by the authors. In their view, change and the ability to welcome new technology and use it to advantage is as essential to a nation's progress as it is to human development. Historically, entrenched elites resisted any change that had the potential to reduce their existing superior position. They use the example of railroads where England embraced them and Austria forbade them, and the result was the movement of goods and people from the farms to the cities that promoted the industrial revolution in England and kept a repressive feudalistic society in Austria where the status quo was maintained at the expense of the population.

The authors use many examples to support their idea of extractive vs. inclusive economies. The Kingdom of the Kongo came in contact with the Portuguese in 1483. They adopted Christianity and firearms, but not the wheel, the plow, or other productivity enhancing technologies of the time. This was, according to the authors, a result of a society that was what we would call a kleptocracy. Any gains the people could achieve were confiscated by the king, so there was no incentive to use technology to improve their lives.
They don't agree with Jared Diamond's geography based determinism or Samuel Huntington's culture and religion based views. They use the examples of Nogales Sonora vs. Nogales Arizona and Natal and Transkei to show places where the culture and geography were the same, but the outcome was drastically different.

An important quote, early in the book, crystalizes the main thesis, "The main obstacle to the adoption of policies that would reduce market failures and encourage economic growth is not the ignorance of politicians, but the incentives and constraints they face from the political and economic institutions in their societies."

In the eyes of the authors, a lack of shared freedom is why nations fail. It is a timely book.

Why Nations Fail

An excellent book similar in focus to Niall Ferguson's "Civilization: The West and the Rest", and similar in outlook as well.

The main essential elements that are necessary to make a nation successful, in the view of the authors, are a sufficiently centralized government to insure personal security, individual property rights, and rule of universally equally applied law.
They think that governmental institutions should be what they call inclusive rather than extractive, having a broad pluralistic base rather than using the population as a source of labor, taxes or other rent-seeking behavior that benefits a minority at the expense of the general population.

Schumpeter's concept of creative destruction is also firmly embraced by the authors. In their view, change and the ability to welcome new technology and use it to advantage is as essential to a nation's progress as it is to human development. Historically, entrenched elites resisted any change that had the potential to reduce their existing superior position. They use the example of railroads where England embraced them and Austria forbade them, and the result was the movement of goods and people from the farms to the cities that promoted the industrial revolution in England and kept a repressive feudalistic society in Austria where the status quo was maintained at the expense of the population.

The authors use many examples to support their idea of extractive vs. inclusive economies. The Kingdom of the Kongo came in contact with the Portuguese in 1483. They adopted Christianity and firearms, but not the wheel, the plow, or other productivity enhancing technologies of the time. This was, according to the authors, a result of a society that was what we would call a kleptocracy. Any gains the people could achieve were confiscated by the king, so there was no incentive to use technology to improve their lives.
They don't agree with Jared Diamond's geography based determinism or Samuel Huntington's culture and religion based views. They use the examples of Nogales Sonora vs. Nogales Arizona and Natal and Transkei to show places where the culture and geography were the same, but the outcome was drastically different.

An important quote, early in the book, crystalizes the main thesis, "The main obstacle to the adoption of policies that would reduce market failures and encourage economic growth is not the ignorance of politicians, but the incentives and constraints they face from the political and economic institutions in their societies."

In the eyes of the authors, a lack of shared freedom is why nations fail. It is a timely book.

These guys are outstanding historians and wonderful economists. This work will give all of those who do not have an institutional view of what civilizations really are and how they work an entirely new and easy-to-understand way of looking at the world and its economic and social complexities. Those interested in the effectiveness of foreign aid and public policy in general should read this book. Spend a little time with the works with the great economists such as Hayek and Keynes if you must, but read Why Nations Fail first. It will help you separate the sense from the nonsense. Let us hope that every member of congress reads this book and takes its lessons to heart

This is a really ambitious book. It present a very compelling economical and political theory and provides a wealth of fascinating supporting historical evidence the theory from different centuries and most continents. I was aware of some of these historical details, but having them explained with the book's main theory creates an important new perspective. The core argument that ties individual and property rights to sustainable economic growth is fascinating. While the book touch upon historical development in Africa and Asia, I thought that the strongest evidence are from Europe (particularly England) and the former European colonies.

great insight into how countries developed, the influences that shape them and their road for growth. You can recognize potential cautions and traps that our current society can fall into if we continue down this road of segmented, repressed and extractive practices currently in vogue in the USA. This is not sustainable.

I purchased this book because Mark Z. reccomended it. What I great decision I made!

This is an insightful book about the most deep reasons why nations fail. It explores, in a fascinating way, the history of almost all nations in the world and explains why they've prospered or why they've failed.

It's incredible the HUGE amaunt of details given in this book, so if you love history you will absolutely love reading it. Those details help the authors explain the topic in a very complete, unbiased way.

I believe this book MUST be read by EVERYONE, since it explains the very foundations of the economical success of the most important countries, and also the big failure of poorest ones. I did even read it with a marker highlighting everything I found so very important.

The most important thing to know before starting reading this book is that you don't need to be an economist/sociologist to understand it. It is very clear and precise. So, I do ecourage eveyone reading this book. You will never regret it. And thanks the authors for taking such a long time making it.

Lots of interesting historcial stories. Theory for how nations prosper and fail is interesting and they present lots of evidence to support it. The text, unfortunately, is repetition and should have been cut by one hundred pages or so.

The work of the authors to put together data from the history of civilisations on our planet is a precious gift to everyone who wants to learn from history. Voltaire's idea that "The only thing you learn from History is that mankind does not learn from History" maybe is true, but if you read this excellent book you will be able to contradict Voltaire - At least by you personally learning from our history (which Voltaire actually commented by "However some gifted individuals often learn lessons from history")

The book has a fairly compelling premise, but I think that outlining his theory and backing it up with examples would need at most two chapters. Most of the rest of the book is just rehashing the same stuff (especially England), and I found myself increasingly skimming over sections after the halfway point, as a result.

To an economist like me, reading Why Nations Fail, by Daron Acemoglu and James Robinson, is akin to being set free from shackles worn since I began studying. However, first let me say that the book has many and serious shortcomings. Let me talk about these before I get into why this book set me free. Since I am going to strongly criticize aspects of the book, let me make clear that this is one of the best books on economics I have read in a long time.

Several criticisms have been leveled in other reviews against this book: it is simplistic and perhaps overly ambitious, the history is bad, it explains away competing explanations. They are all true.

The book is undoubtedly simplistic. Basically, the authors state that the institutions of a nation or society can be placed on a one dimensional continuum running from "extractive" to "inclusive" and this explains the history of humanity from the neolithic to the present day. A second leitmotif is that the economic and political institutions complement each other and that economically inclusive but politically extractive institutions cannot last for long (as well as the opposite). Finally, since political and economic institutions reinforce each other, they are quite difficult to change, leading to what the authors call "the iron law of oligarchy." Needless to say, this really oversimplifies the analysis of institutions and history. While Acemoglu and Robinson give many, many historical examples to illustrate their thesis, some are more convincing than others. They use a huge mallet to hammer all the facts into their mold, either ignoring or re-interpreting contrary evidence.

I am no historian, but I do know the history of the region in which I live, Latin America, reasonably well. When Latin American examples were used in the book, they were shallow and even wrong. For example, the authors talk quite a bit about the establishment of indigenous "serfdom", with terrible extractive institutions such as the encomienda and repartimiento, in much of Hispanic America. I agree the story they tell is quite important but they do not get it quite right. Acemoglu and Robinson tell the tale of these institutions as if they were simply set in place by colonizing Spaniards when the truth was much more complex, involving conflicts and constant negotiation between the Spanish colonizers, the Spanish Crown, and the conquered peoples themselves. The colonizers wanted to set up slavery instead of serfdom but were impeded from doing so by the Crown through the Leyes Nuevas. The story is told marvelously well in La Patria del Criollo by Severo Martinez Pelaez. The funny thing is that the correct narrative would fit well into the inclusive-extractive framework with a richness that comes from putting in two groups of elite actors with divergent interests, but Acemoglu and Robinson tell it so simplistically so as to miss out.

Likewise, the authors analyze, in different points of the book, Colombia and Brazil, with exceptional praise for Brazilian institutions while they heap abuse upon the Colombian ones. Brazil at the present time has, evidently, better institutions than a Colombia only (we hope) beginning to emerge from decades of civil war. But these two countries are much more alike than different. If you believe the tale told by Acemoglu and Robinson, they could have been comparing Japan and Burma, and not two nations with similar history, GDP, and institutions. While Colombia has seen many horrors and has a long road to travel, recent progress in reigning in lawlessness and chaos is undeniable. While Brazil has seen amazing institutional progress in the last fez decades, many of its cities suffer with murder rates higher than those of Colombian cities, de facto slave labor can be still found in some areas, and its income and especially property distributions are still among the most unequal in Latin America. Especially jarring is that, in other parts of the book, the authors place great emphasis on when institutions limit executive power, giving as an example the American system's unwillingness to allow FDR to pack the Supreme Court to get his way. The same happened in Colombia when Alvaro Uribe passed legislation allowing him to run for a third term and the Supreme Court shot it down with the broad support of Colombian society, including Uribe's allies.

The same can be said of their analysis of Mexico and Argentina: maybe not wrong, but terribly shallow. I know little of the Glorious Revolution, the Roman Empire, the Meiji Restoration, the history of Botswana, or much else of what the book is based upon. But if the standard is the same as the their Latin American examples, then much of the book based upon is poor history. In defense of the authors, it is difficult to draw the details with finesse when painting with a broad brush and the history of humanity from the neolithic to present day is about as broad as you can get in the social sciences.

A final criticism is that Acemoglu and Robinson do not give competing explanations for the backwardness of nations the credit they deserve. They explain away rather than seek dialogue. They classify competing explanations into the Geography Hypothesis, the Culture Hypothesis, and the Ignorance Hypothesis. One problem is that they ignore other competing explanations that go from scientific knowledge (see Margaret Jacob's Scientific Culture and the Making of the Industrial West) to various Marxist explanations based upon capital accumulation. While Acemoglu and Robinson obviously admire Jared Diamond's Guns, Germs, and Steel - which is very well-argued "geography is destiny" book - they ignore other important proponents of the Geography Hypothesis such as Kenneth Pommeranz. I feel their case would be made stronger if they argued that the two approaches were complementary and not adversarial. A relation between geography, technology, political institutions, and economic institutions would be a much stronger theory than institutions alone.

With regards to the Culture Hypothesis, they are (I believe) correct in criticizing it for being so fluid as to be virtually without content. But here my take is not entirely neutral as I particularly loathe the Culture Hypothesis.

But it is on the Ignorance Hypothesis that Acemoglu and Robinson fire their cannon with relish. Being intelligent economists in contact with the intellectual world of "development" I am sure they are very frustrated at the arrogance of policy advisors from the likes of the World Bank, United Nations, or IMF who believe they have the solution to all the developing world's problems "if only policymakers would listen to them." I am not unsympathetic to their disgust at these people but I think Acemoglu and Robinson throw the baby away with the dirty bath water. History is just too full of examples of disastrous policies (disastrous for those who implemented them, not only for the poor souls who inhabit their countries) for the Ignorance Hypothesis to be dismissed out of hand. The authors blame almost all, if not all, bad policies on the material interests of the elite whose position would be endangered by good policy.

A more subtle, and, in my opinion, much more serious, problem is that knowledge and interests are not independent. It is one thing for the elite to choose bad (bad for the many) policy if that policy can be dressed up in plausible and attractive intellectual robes and quite another if that policy is seen as nothing more than plundering of the many by the few (see Antonio Gramsci on role of the intellectual in allowing policy agendas to go forward or not). The "economic nationalism" that has destroyed so many African, Latin American, and Middle Eastern economies is not just pure extraction of wealth of the many by the few; it also dressed in a coherent economic theory espoused by a host of intelligent sociologists and economists (for a popular, if somewhat limited exposition, see The Open Veins of Latin America by Eduardo Galeano). This is why dismissal of the Ignorance Hypothesis is so dangerous: not only is knowledge power, but economic theories that are on your side are also power.

So the book has quite a few shortcomings. Why did I like it so much?

Because as economists we are taught from course one that you cannot have your cake and eat it too. The trade-off between efficiency and equity has been fed to us since before we were weaned. The result to an economist very interested in equality such as myself are intellectual shackles that hobble and cripple our thinking.

Acemoglu and Robinson show us that in the real world, not some paretian maximum efficiency world, but the real one full of monopolies and other horrendous extractive institutions, there is no such trade-off. Equity is efficiency. Only egalitarian institutions allow for the full creative potential of people to be unleashed and thus only egalitarian institutions allow for boundless, unlimited growth based upon technology and productivity. There may be an equity-efficiency trade-off in Sweden or Norway, but certainly not in Mexico, Brazil, Haiti, Zimbabwe, or Pakistan. Much of this has been around in different guises since Schumpeter (who the authors cite extensively) and, more recently, in the endogenous growth literature, but nowhere has it been as clearly stated as in Why Nations Fail.

Why Nations Fail not only states this as its official position but, in spite of all its shortcomings, argues the point so well so as to be entirely convincing (at least to me). The fact that the authors get much of the history not quite right and that they fight rather than incorporate "competing" explanations does not reduce importance of the book and its central message. The sheer optimism of its viewpoint is as liberating as the Emancipation Proclamation.

Avoiding absolutist theories the thesis draws on the history of mankind right back to its origins and spans the globe in its analysis to provide a realistic and powerful view on the drivers of prosperity. Possibly not as crisply written as it could have been, but intriguing all the way as it continually unfolds new layers of history.

The authors start by trashing theories based on culture and geography, as if their theory (inclusive vs. extractive institutions) is disconnected from culture and geography. The chains of causality are complex in understanding why some societies prosper, but just dismissing all alternative theories by providing anecdotal evidence is plainly ridiculous. In the notes they refer to one of their own academic articles providing some kind of justification, but the book does not elaborate. Economics is a young since and tends to be quite dogmatic when it thinks it has found the truth. The authors clearly believe in their truth, but I am convinced that in another ten years another economist will claim another truth. Some humility would be in order.

The book is very well written, but is too simplified. For instance, do we really know to be told what GDP is? It is as if they are writing the book aimed at bored, American undergraduates. Furthermore, to make the American lay reader keen to read the book, the US is always good. At one point they talk about Barbados having extractive institutions in the 17th century because they had slaves. When discussing the US in the 17th century, its institutions were inclusive because they had some kind of democracy. So convenient to just forget the US slaves and the native Indians.

I have no major problem with a theory about institutions which, by the way, is similar to Douglass North Institutions, Institutional Change and Economic Performance (Political Economy of Institutions and Decisions), but with a Marxian twist. However, a bit more engagement with the existing research on institutional theory would have been nice. To that critique the authors would undoubtedly respond that this is not a scholarly book but a pop-science book. Maybe a fair response, but I would imagine that potential readers would be a bit more educated.

While I have sympathy for the authors' theory, I have to say that it is very simplistic. The distinction between inclusive and extractive institutions is key. I am probably a bit unfair but if the authors seem to like a country, it is judged to have inclusive institution and vice versa (i.e. they seem to grab evidence to support their existing view). More to the point, the authors argue for a power perspective. A group in society will implement extractive institutions if they have the power to do so. As I mentioned above, this is almost a Marxian perspective, but that is not mentioned in the book. This is a good illustration of what I mean with the authors' theorising being simplistic.

The book describes a large number of historical episodes that are very interesting. The authors try to fit them to their theories. I certainly think that the author get it right most of the time but I am left with the nagging suspicion that the authors are fabricating their evidence. I honestly think that they are not really trying to fabricate, but their know-it-all attitude and ad hoc explanations when the theory does not seem to work are big warning flags for me.

In fact I wonder if their framing is the correct one because what they label extractive/inclusive institutions seems to boil down to extractive institutions not engaging in creative destruction (Schumpeter's term for dynamic capitalism). Extractive institutions are upheld by people with so much power so they can stop creative destruction. So why talk about institutions when the mechanisms seems to be something else. I can find good reasons for doing what the authors have done, but what I dislike is that such a discussion seems to be beyond the authors' interest. Again the book becomes shallow.

This book deserves a read if you read many books. If you want to read one better pop-science book with a similar theme I would settle for the historian Ferguson's Civilization: The West and the Rest, which covers similar ground. I found that book more insightful and I learnt more history by reading it. The current authors start their book by contrasting South and North America. Ferguson deals with the same topic which makes me wonder.

Finally, a pet topic of mine: A trend I absolutely hate is to put footnotes as endnotes. This book goes one step further by even removing the references to the endnotes. What is wrong with adding footnotes on the relevant page so that more advanced reader can get a mouthful?

Should be required reading for all US high School students and all University students studying US History, World History and Economics. If more voters understood the facts and principles presented in this book the United States would have a much brighter future. Highly recommended.

Living in South Africa today, following the incredible birth of our new democracy in the mid 90's, I see our nation slipping into a grossly extractive mindset under Jacob Zuma and his ANC leadership. Business institutions are slow to challenge government's extractive ways, because they too are caught in the web. This book highlights and explains with clarity, the trap that Governments set for Business institutions to fall into, thereby removing them from the real power that business can and should display - a tax revolt.

Great read that makes a strong case for pluralism being directly tied to widespread prosperity and absolutism or oligarchy creating a small prosperous elite and a large poor class. The only negative I can really voice is that many points are beat to death which at times can make it a tedious read. If you can get over that than it is definitely worth your time.

Ignorance, geography, culture? It’s intriguing to consider that lingering national poverty has little or nothing to do with some of these famous scapegoats. A good blueprint on how to turn things around.

This is a surprisingly fun read and could be read as a companion to Guns, Germs, and Steel. I read it for an international relations course, but then I also gave a few copies as Christmas presents this year. A first for me for a "textbook."

This is an excellent book on the factors that determine the success of some societies over others. It provides a number of actual cases from all over the world to support its assumptions. There are two reasons why I do not award it five stars. The first one that I consider it a little repetitive and the second that I would have liked to have these examples supported with some more economical figures and charts.
Summarising, I recommend this book to everybody interested in the progress of society.