Why Nations Fail: The Origins of Power, Prosperity, and Poverty

Why Nations Fail: The Origins of Power, Prosperity, and Poverty

by Daron Acemoglu, James Robinson


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Why Nations Fail: The Origins of Power, Prosperity, and Poverty by Daron Acemoglu, James Robinson

Brilliant and engagingly written, Why Nations Fail answers the question that has stumped the experts for centuries: Why are some nations rich and others poor, divided by wealth and poverty, health and sickness, food and famine?

Is it culture, the weather, geography? Perhaps ignorance of what the right policies are?

Simply, no. None of these factors is either definitive or destiny. Otherwise, how to explain why Botswana has become one of the fastest growing countries in the world, while other African nations, such as Zimbabwe, the Congo, and Sierra Leone, are mired in poverty and violence?

Daron Acemoglu and James Robinson conclusively show that it is man-made political and economic institutions that underlie economic success (or lack of it). Korea, to take just one of their fascinating examples, is a remarkably homogeneous nation, yet the people of North Korea are among the poorest on earth while their brothers and sisters in South Korea are among the richest. The south forged a society that created incentives, rewarded innovation, and allowed everyone to participate in economic opportunities.

The economic success thus spurred was sustained because the government became accountable and responsive to citizens and the great mass of people. Sadly, the people of the north have endured decades of famine, political repression, and very different economic institutions—with no end in sight. The differences between the Koreas is due to the politics that created these completely different institutional trajectories.

Based on fifteen years of original research Acemoglu and Robinson marshall extraordinary historical evidence from the Roman Empire, the Mayan city-states, medieval Venice, the Soviet Union, Latin America, England, Europe, the United States, and Africa to build a new theory of political economy with great relevance for the big questions of today, including:

- China has built an authoritarian growth machine. Will it continue to grow at such high speed and overwhelm the West?

- Are America’s best days behind it? Are we moving from a virtuous circle in which efforts by elites to aggrandize power are resisted to a vicious one that enriches and empowers a small minority?

- What is the most effective way to help move billions of people from the rut of poverty to prosperity? More philanthropy from the wealthy nations of the West? Or learning the hard-won lessons of Acemoglu and Robinson’s breakthrough ideas on the interplay between inclusive political and economic institutions?

Why Nations Fail will change the way you look at—and understand—the world. 

Product Details

ISBN-13: 9780307719225
Publisher: The Crown Publishing Group
Publication date: 09/17/2013
Pages: 544
Sales rank: 41,453
Product dimensions: 5.40(w) x 7.86(h) x 1.18(d)

About the Author

DARON ACEMOGLU is the Killian Professor of Economics at MIT. In 2005 he received the John Bates Clark Medal awarded to economists under forty judged to have made the most significant contribution to economic thought and knowledge.

JAMES A. ROBINSON, a political scientist and an economist, is the David Florence Professor of Government at Harvard University. A world-renowned expert on Latin America and Africa, he has worked in Botswana, Mauritius, Sierra Leone, and South Africa.

Table of Contents

Why Egyptians filled Tahrir Square to bring down Hosni Mubarak
and what it means for our understanding of the causes of
prosperity and poverty
1. So Close and Yet So Different
Nogales, Arizona, and Nogales, Sonora, have the same people,
culture, and geography. Why is one rich and one poor?
2. Theories That Don’t Work
Poor countries are poor not because of their geographies or cultures,
or because their leaders do not know which policies will enrich
their citizens
3. The Making of Prosperity and Poverty
How prosperity and poverty are determined by the incentives
created by institutions, and how politics determines what
institutions a nation has
4. Small Differences and Critical Junctures: The Weight of History
How institutions change through political conflict and how
the past shapes the present
5. “I’ve Seen the Future, and It Works”: Growth Under Extractive Institutions
What Stalin, King Shyaam, the Neolithic Revolution, and the
Maya city-states all had in common and how this explains why
China’s current economic growth cannot last
6. Drifting Apart
How institutions evolve over time, often slowly drifting apart
7. The Turning Point
How a political revolution in 1688 changed institutions in
England and led to the Industrial Revolution
8. Not on Our Turf: Barriers to Development
Why the politically powerful in many nations opposed the
Industrial Revolution
9. Reversing Development
How European colonialism impoverished large parts of the world
10. The Diffusion of Prosperity
How some parts of the world took different paths to prosperity
from that of Britain
11. The Virtuous Circle
How institutions that encourage prosperity create positive feedback
12. The Vicious Circle
How institutions that create poverty generate negative
feedback loops and endure
13. Why Nations Fail Today
Institutions, institutions, institutions
14. Breaking the Mold
How a few countries changed their economic trajectory by
changing their institutions
15. Understanding Prosperity and Poverty
How the world could have been different and how understanding
this can explain why most attempts to combat poverty have failed
Bibliographical Essay and Sources

What People are Saying About This

From the Publisher

"Should be required reading for politicians and anyone concerned with economic development." —Jared Diamond, New York Review of Books

"...bracing, garrulous, wildly ambitious and ultimately hopeful. It may, in fact, be a bit of a masterpiece."Washington Post

“For economics and political-science students, surely, but also for the general reader who will appreciate how gracefully the authors wear their erudition.”Kirkus Reviews
“Provocative stuff; backed by lots of brain power.”Library Journal

“This is an intellectually rich book that develops an important thesis with verve. It should be widely read.”Financial Times

“A probing . . . look at the roots of political and economic success . . . large and ambitious new book.” The Daily

Why Nations Fail is a splendid piece of scholarship and a showcase of economic rigor.” —The Wall Street Journal

"Ranging from imperial Rome to modern Botswana, this book will change the way people think about the wealth and poverty of nations...as ambitious as Jared Diamond's Guns, Germs, and Steel."
Bloomberg BusinessWeek

“The main strength of this book is beyond the power of summary: it is packed, from beginning to end, with historical vignettes that are both erudite and fascinating. As Jared Diamond says on the cover: 'It will make you a spellbinder at parties.' But it will also make you think.” —The  Observer (UK)

"A brilliant book.” Bloomberg (Jonathan Alter)

Why Nations Fail is a wildly ambitious work that hopscotches through history and around the world to answer the very big question of why some countries get rich and others don’t.” The New York Times (Chrystia Freeland)

"Why Nations Failis a truly awesome book. Acemoglu and Robinson tackle one of the most important problems in the social sciences—a question that has bedeviled leading thinkers for centuries—and offer an answer that is brilliant in its simplicity and power. A wonderfully readable mix of history, political science, and economics, this book will change the way we think about economic development. Why Nations Fail is a must-read book." —Steven Levitt, coauthor of Freakonomics

"You will have three reasons to love this book. It’s about national income differences within the modern world, perhaps the biggest problem facing the world today. It’s peppered with fascinating stories that will make you a spellbinder at cocktail parties—such as why Botswana is prospering and Sierra Leone isn’t. And it’s a great read. Like me, you may succumb to reading it in one go, and then you may come back to it again and again." —Jared Diamond, Pulitzer Prize–winning author of the bestsellers Guns, Germs, and Steel and Collapse

"A compelling and highly readable book. And [the] conclusion is a cheering one: the authoritarian ‘extractive’ institutions like the ones that drive growth in China today are bound to run out of steam. Without the inclusive institutions that first evolved in the West, sustainable growth is impossible, because only a truly free society can foster genuine innovation and the creative destruction that is its corollary." —Niall Ferguson, author of The Ascent of Money

"Some time ago a little-known Scottish philosopher wrote a book on what makes nations succeed and what makes them fail. The Wealth of Nations is still being read today. With the same perspicacity and with the same broad historical perspective, Daron Acemoglu and James Robinson have retackled this same question for our own times. Two centuries from now our great-great- . . . -great grandchildren will be, similarly, reading Why Nations Fail." —George Akerlof, Nobel laureate in economics, 2001

"Why Nations Fail is so good in so many ways that I despair of listing them all. It explains huge swathes of human history. It is equally at home in Asia, Africa and the Americas. It is fair to left and right and every flavor in between. It doesn’t pull punches but doesn’t insult just to gain attention. It illuminates the past as it gives us a new way to think about the present. It is that rare book in economics that convinces the reader that the authors want the best for ordinary people. It will provide scholars with years of argument and ordinary readers with years of did-you-know-that dinner conversation. It has some jokes, which are always welcome. It is an excellent book and should be purchased forthwith, so to encourage the authors to keep working." —Charles C. Mann, author of 1491 and 1493

“Imagine sitting around a table listening to Jared Diamond, Joseph Schumpeter, and James Madison reflect on over two thousand years of political and economic history.  Imagine that they weave their ideas into a coherent theoretical framework based on limiting extraction, promoting creative destruction, and creating strong political institutions that share power and you begin to see the contribution of this brilliant and engagingly written book.” —Scott E. Page, University of Michigan and Santa Fre Institute

“This fascinating and readable book centers on the complex joint evolution of political and economic institutions, in good directions and bad. It strikes a delicate balance between the logic of political and economic behavior and the shifts in direction created by contingent historical events, large and small at ‘critical junctures.' Acemoglu and Robinson provide an enormous range of historical examples to show how such shifts can tilt toward favorable institutions, progressive innovation and economic success or toward repressive institutions and eventual decay or stagnation. Somehow they can generate both excitement and reflection.” —Robert Solow, Nobel Laureate in Economics, 1987

“It’s the politics, stupid! That is Acemoglu and Robinson’s simple yet compelling explanation for why so many countries fail to develop. From the absolutism of the Stuarts to the antebellum South, from Sierra Leone to Colombia, this magisterial work shows how powerful elites rig the rules to benefit themselves at the expense of the many.  Charting a careful course between the pessimists and optimists, the authors demonstrate history and geography need not be destiny. But they also document how sensible economic ideas and policies often achieve little in the absence of fundamental political change.”—Dani Rodrik, Kennedy School of Government, Harvard University

“Two of the world’s best and most erudite economists turn to the hardest  issue of all: why are some nations poor and others rich? Written with a deep knowledge of economics and political history, this is perhaps the most powerful statement made to date that ‘institutions matter.’  A provocative, instructive, yet thoroughly enthralling book.” —Joel Mokyr, Robert H. Strotz Professor of Arts and Sciences and Professor of Economics and History, Northwestern University

“A brilliant and uplifting book—yet also a deeply disturbing wake-up call. Acemoglu and Robinson lay out a convincing theory of almost everything to do with economic development. Countries rise when they put in place the right pro-growth political institutions and they fail—often spectacularly—when those institutions ossify or fail to adapt.  Powerful people always and everywhere seek to grab complete control over government, undermining broader social progress for their own greed. Keep those people in check with effective democracy or watch your nation fail.” —Simon Johnson, co-author of 13 Bankers and professor at MIT Sloan

“This important and insightful book, packed with historical examples, makes the case that inclusive political institutions in support of inclusive economic institutions is key to sustained prosperity. The book reviews how some good regimes got launched and then had a virtuous spiral, while bad regimes remain in a vicious spiral.  This is important analysis not to be missed.” —Peter Diamond, Nobel Laureate in Economics
“Acemoglu and Robinson have made an important contribution to the debate as to why similar-looking nations differ so greatly in their economic and political development. Through a broad multiplicity of historical examples, they show how institutional developments, sometimes based on very accidental circumstances, have had enormous consequences. The openness of a society, its willingness to permit creative destruction, and the rule of  appear to be decisive for economic development.” —Kenneth Arrow, Professor Emeritus, Stanford University, Nobel Laureate in Economics, 1972
“Acemoglu and Robinson—two of the world's leading experts on development—reveal why it is not geography, disease, or culture which explains why some nations are rich and some poor, but rather a matter of institutions and politics. This highly accessible book provides welcome insight to specialists and general readers alike.” —Francis Fukuyama, author of The End of History and the Last Man and The Origins of Political Order

“Some time ago a little known Scottish philosopher wrote a book on what makes nations succeed and what makes them fail.  The Wealth of Nations is still being read today.  With the same perspicacity and with the same broad historical perspective, Daron Acemoglu and James Robinson have re-tackled this same question for our own times.  Two centuries from now our great-great-…-great grandchildren will be, similarly, reading Why Nations Fail.” —George Akerlof, Nobel Laureate in Economics, 2001
“In this stunningly wide ranging book Acemoglu and Robinson ask a simple but vital question, why do some nations become rich and others remain poor?  Their answer is also simplebecause some polities develop more inclusive political institutions.  What is remarkable about the book is the crispness and clarity of the writing, the elegance of the argument, and the remarkable richness of historical detail.  This book is a must read at a moment where governments right across the western world must come up with the political will to deal with a debt crisis of unusual proportions.” —Steve Pincus, Bradford Durfee Professor of History and International and Area Studies, Yale University
“The authors convincingly show that countries escape poverty only when they have appropriate economic institutions, especially private property and competition. More originally, they argue countries are more likely to develop the right institutions when they have an open pluralistic political system with competition for political office, a widespread electorate, and openness to new political leaders. This intimate connection between political and economic institutions is the heart of their major contribution, and has resulted in a study of great vitality on one of the crucial questions in economics and political economy.” — Gary S. Becker, Nobel Laureate in Economics, 1992
“This not only a fascinating and interesting book: it is a really important one.  The highly original research that Professors Acemoglu and Robinson have done, and continue to do,  on how economic forces, politics and policy choices evolve together and constrain each other, and how institutions affect that evolution, is essential to understanding the successes and failures of societies and nations.  And here, in this book, these insights come in a highly accessible, indeed riveting form.  Those who pick this book up and start reading will have trouble putting it down.” ¯Michael Spence, Nobel Laureate in Economics, 2001

"In this delightfully readable romp through 400 years of  history, two of the giants of contemporary social science bring us an inspiring and important message: it is freedom that makes the world rich. Let tyrants everywhere tremble!" —Ian Morris, Stanford University, author of Why the West Rules – For Now

“Acemoglu and Robinson pose the fundamental question concerning the development of the bottom billion. Their answers are profound, lucid, and convincing.” ―Paul Collier, Professor of Economics, Oxford University, and author of The Bottom Billion

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Why Nations Fail: The Origins of Power, Prosperity, and Poverty 3.8 out of 5 based on 0 ratings. 31 reviews.
CENY More than 1 year ago
If you're interested in international relations and economics, this is a must-read, as it's definitely thought-provoking. However: 1. It's repetitive; it repeats its theme of "extractive institutions do not lead to long-term growth" over and over, and it even summarizes what the book just stated a few pages before, over and over. 2. It doesn't show any data to back up its arguments. Extractive systems don't produce growth over the long run? Show me tables, graphs, etc., please. Not just the conclusion that extractive systems don't produce growth over the long run. 3. It gets its history wrong in an effort to back up its key arguments. For example, it claims that Austria-Hungary was an "absolutist" monarchy until World War I. It wasn't the most free country in the world, but by the 1900s, it was an emerging democracy, with elected legislatures, limits on the monarch's power, etc. Also, it states that the Civil Rights movement in the US succeeded in part because Southern "planters" were less resistant to it due to economic changes. Right...those planters (They were long gone by the 1950s). 4. Finally, it just summarily dismisses alternative theories about economic growth. Yes, Country X was wealthier than North America in 1500- and this book shows that as a reason why geography, climate and other reasons don't really matter in economic growth. In the rudimentary economy of 1500, perhaps Country X's geography and climate weren't a problem. But just maybe in 2012, its climate and geography and other factors don't work to produce success in today's economy.
Anonymous More than 1 year ago
This book lays out an interesting theory that suggests the requirement for a new approach towards global politics and economics. On the face of it, the theory certainly makes sense and the authors provide plenty of examples that support their theory. The narrative was easy to follow, but the book was a slow read. Likely because the same point was made repeatedly, only with different examples.
Anonymous More than 1 year ago
Very interesting and insightful theory of development. Plausibly explains why Iraq and Afghanistan are turning out as they are and why the persistent poverty in certain parts of the world. Great read
Anonymous More than 1 year ago
A book that needs to be read slowly because it is filled with detailed studies -- and that's a good thing. The authors do a great job of illustrating their thesis. It's the most substantive book of its kind that I've seen. This book is a big step forward. You should read it. However, the authors do omit some relevant considerations. For example, when discussing the Republic of Venice they don't mention externals such as the Ottomans gaining control of the Mediterranean or de Gama's discovery of a shorter route to the Orient.
Anonymous More than 1 year ago
This was an interesting book with some parts that were dry and textbook like. After reading the history of the nations of the world I can't help but think that the US is in trouble. The odds are against this nation making it. There is too many destructive societies around us to keep us on the right path. The youth of the world need to read this book so they can steer their nations to stay on a prosperous path.
huskyterp More than 1 year ago
In Why Nations Fail, Daron Acemoglu and James A. Robinson present a strong argument for the significant role of economic and political institutions in determining the success or failure of a nation. According to the authors, inclusive institutions provide citizens with the incentives (law and order, [intellectual] property rights, and so forth) that encourage people to become economically productive members of society. On the other hand, extractive (exploitative) political economic and political institutions leave citizens with little motivation to contribute to the commonwealth of a nation as the fruits of their labor are funneled into the pockets of an elite minority. Acemoglu and Robinson provide a lot of details, but the details often cross into redundancy territory; to be fair to the writers, it's not easy to avoid some repetitiveness with a book of this scope. However, my biggest concern with the work is how they cover successful nations. Early on, the institutional arguments for failing/failed nations are presented in a political vacuum, as if more powerful nations don't exert influence on developing states. This concern is later addressed in a chapter on the influence of the slave trade on the political/economic development in certain African nations. Unfortunately, there is little more than a brief acknowledgement of the fact that successful nations with inclusive political/economic institutions support and benefit from extractive institutions overseas. So I couldn't help but wonder if extractive institutions are indeed a necessity for a nations success as long as they manage to capitalize on the extractive, exploitative institutions beyond their borders? I know the titular question is "why nations fail," but I feel that the book would have been more complete if they provided a more nuanced picture of "why nations succeed."  Ultimately, Why Nations Fail is a solid book with a great deal of research, but treating institutions as the answer to a nations' woes cannot fully account for the complexities that every nation must deal with. In short, the book shouldn't stand alone, but should be placed in conversation with Jared Diamond's Guns, Germs, and Steel and Naomi Klein's The Shock Doctrine. 
Anonymous More than 1 year ago
Anonymous More than 1 year ago
The best explanation I have seen as to why the vast sums of monies provided to the impoverished nations of the world do so little good. It is time for the U.S.A. and other donor nations to rethink the entire process of selecting the recipients of, managing, and delivering foreign aid. The observations and ideas presented in this book should enter into that process. The authors make their case in a thorough and methodical way, but I found the book to be a slow read. I also found it to be more than worth the effort and recommend it to those who have an interest in why nations fail.
Anonymous More than 1 year ago
Anonymous More than 1 year ago
The authors thesis, that political and economic control by elites, is well researched and persuasive. The grassroots success story of Brazil is encouraginng. I do wonder why the Chinese molde of African development is not discussed? Overall an excellent look at the underpinnings of prosperity.
book_omnivore More than 1 year ago
Excellent explanations of why some nations succeed and others fail. The authors' basic framework is pretty simple, and they offer many historical examples as anecdotal evidence to support it. There are also many nuances to the framework, too, which many other reviewers seem to have missed. The authors' framework is more like an "operating system" a person can use to analyze past and current systems of government and economics, rather than a plain explanation. (It's not the only operating system a person could use, of course.) I find it fascinating to match up current events in the US with the writers' framework. The book also is non-partisan; conservatives will find things to like in it, such as the insistence on property rights for a nation to succeed. Liberals will like the insistence of including all members of society in the political and economic spheres of the nation. The book is written by economists, but given that, I still found the historical examples and analyses engaging. Takes some work on the reader's part, though, and can be repetitive at times. Still, I have a feeling people will be reading this one far into the future.
Anonymous More than 1 year ago
This long book is filled with interesting historical examples, which the authors try to fit into their theory. It discounts the theories of other economists and repeatedly states its own theory. For example, the first chapter is about American colonization by Spain and Great Britain. There are immediate attempts to make these events fit the theory without a look at other possible causes such as the markets these countries provided fot their colonies. This is repeated with other historical examples. I would recommend this book to anyone interested in economics and history. I believe most of the history is well researched, even if it may be twisted to fit the book's theme.
Roybeanhs More than 1 year ago
This book is excellent in explaining the relationship between a nations wealth, its institutions and its political makeup. .
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I was impressed with this book.
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*Bends down and sucks his pe.n.is* while she rubs her boo.obs