peromaneste™: de ce natiunile esueaza?motive sau rationalizari

Daren Acemoglu

"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-tac...

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.

A Return to Political Economy

Ken McCormick "kmccormick12"

Why are some nations rich and others poor? The question has occupied economists since Adam Smith wrote An Inquiry into the Nature and Causes of the Wealth of Nations. As Nobel laureate Robert Lucas said, once you start thinking about that question, "it is hard to think about anything else." Daron Acemoglu and James Robinson have been thinking hard about it, and Why Nations Fail provides their answer.

Their main thesis is "that while economic institutions are critical for determining whether a country is poor or prosperous, it is politics and political institutions that determine what economic institutions a country has" (page 43). That the right economic institutions are vital has long been recognized; what Acemoglu and Robinson do is emphasize the critical role of politics. They argue that an inclusive political system will allow for an inclusive economic system. Such a system provides incentives for people to acquire skills, work hard, save, invest, and, most importantly, innovate. In contrast, an extractive political system exists for the benefit of a narrow elite, and creates an extractive economic system. The masses cannot influence the political system, and have no incentives to exert themselves creating wealth that will be taken from them by the political elites. Extractive economic systems can achieve growth for a short while, but cannot achieve persistent growth. That is because they cannot generate significant technological change and because there will be infighting over the system's spoils.

The authors provide a wealth of historical examples from all over the world and from ancient to modern times. The numerous examples allow the authors to illustrate their ideas with concrete examples. It also allows them to debunk many of the popular explanations for why some nations are rich and others are poor: geography, culture, and ignorance. After you read this book, you will wonder why you ever thought those ideas made any sense at all.

Overall, this is an excellent, informative, and thought-provoking book. My major complaint is that it could have used a good editor. It is repetitive in places. The authors also sometimes get carried away discussing irrelevant historical details. For example, do we really need to know that Geiseric, king of the Vandals, had his first marriage annulled and sent his ex-wife home, but not before he cut off her ears and nose? Nevertheless, this is a book worth reading by anyone interested in alleviating global poverty. I especially recommend it to the Don Quixotes who think that just a little more aid will make poor countries rich.

Inclusive political and economic institutions

Srinivas P. Ganti "prasad" (Plainsboro, NJ) –

One line summary from this immensely interesting book is that inclusive political and economic institutions are what make a nation successful. Also, a statistical turn at a critical juncture in a nation's history plays an important role as well. Inclusion means most population of a country participates in the political and economic processes of a country. Lack of such atmosphere ensures the failure of a nation. An example is North Korea. Whereas South Korea started from the same position at the end of the Korean war, it grew by leaps and bounds whereas the dictatorial North Korea languished.

Conflicts do arise in dealing with property, contracts, business settlements etc. A proper way of resolving conflict is dependent on the economic and political institutions of a country. Absent such a process, it robs the incentive to work, let alone any incentive to undertake investments and innovations.

Growth can also come through extractive institutions, but will not be sustainable in the long run. Slavery in the southern US, sugar plantations in Jamaica are examples of such extractive institutions. Authors say that the current Chinese growth is also through extractive institutions and is not likely to be sustainable. In China, there are other reasons as well. Property rights are not entirely secure. Some entrepreneurs are expropriated. The connection between business and the party is highly lucrative for both.

Technological innovations are required to make human societies prosperous, but also involves the replacement of the old with the new. Dictators and elite always have a vested interest in preserving the old and profiting from it. Tsar Nicholas I feared that the railways would bring revolution to Russia. Siaka Stevens in Sierra Leone shelved a half built railway line out of the same fear. Similarly, the opposition to the printing press had the obvious consequences for low levels of literacy, education, and economic success in the Ottoman empire.

In England in 1215, the Barons stood up against King John and made him sign the Magna Carta. The Barons further created a council for consultation before the King could raise taxes. After the glorious revolution of 1689, King William and the Parliament negotiated a new constitution. Bank of England was created in 1694 as a source of funds for the Industry. In 1760 the combination of all these factors-improved and new property rights, improved infrastructure, a changed fiscal regime, greater access to finance, and aggressive protection of traders and manufacturers, led to a jump in the number of patented inventions, and eventually led to the Industrial Revolution.

Spain was forged in 1492 with the merger of the kingdoms of Castile and Aragon via the marriage of Queen Isabella and King Ferdinand. They expropriated property from the Jews who were made to leave Spain without their wealth. They financed the conquistador trips to Latin America, which was colonized brutally through the creation of extractive institutions. Both Spain and Latin America did not prosper as a result.

As a part of Meiji restoration in Japan, resulting from US influence in Japan in the 19th century, the shoguns and the samurai class were abolished, leading to the destruction of feudalism. Individual property rights were introduced and infrastructure building began. Steamship line between Tokyo and Osaka and the first railway line between Tokyo and Yokohama were built. In 1890 Japan became the first Asian country to adopt a written constitution, with a constitutional monarchy an elected parliament, the Diet, and independent judiciary. These factors enabled Japan to be the primary beneficiary from the Industrial Revolution in Asia.

In the US, the Homestead act of 1862 was a pluralistic and inclusive act when many settlers got free land. While more than 600,000 were killed in the US Civil War, the planter elites suffered very few casualties. The law exempted one slave holder for every 20 slaves held from war services. They ensured the plantation economy even after the war. President Rutherford Hayes needed southern support in exchange for pulling out Union soldiers. This led to Jim Crow laws. As a result the South did not develop much. Only after civil rights movement in the 1960s did the South start catching up with the North.

When a country consists of multiple tribes, lack of political centralization means lack of law and order. Stability can result only when one group of people is sufficiently more powerful than others to build a state. Somalia is an example with multiple clans with no central authority. It is an example of a failed nation. On the contrary, Seretse Khama politically centralized Botswana after Independence, established English as a common medium, used diamond money to invest in public services. As a result, Botswana is a well governed state in Africa with the fastest growth.

Examples of Botswana, Japan, US, England amply illustrate the point of inclusive economic and political institutions leading to prosperity. The authors strongly make their case with lot of detailed history. A book worth reading more than once.

One little problem... please mind the gap (a must read nonetheless)

JA008 –

As I'm finishing the book I'd like to point out at least some very important deficiencies.

But before I do so as a parenthesis: though the book is incomplete, in my mind a bit naive in some ways, nonetheless this is a solid book that's a must read for all interested in economics and/ or politics, as it brings into focus the often neglected view of the correlation between politics and economics (the mantra of the book being that inclusive political institutions bring about inclusive economic institutions and foment a spread of a nation's wealth as well as political rights. To summarize, democratic politics = democratic economics = wide spread prosperity).

Now for the weaknesses: the book has some serious voids in the presentation of its theory. As an example when it describes Guatemala's "vicious circle" in chapter 12, and simply states that the democratic regime in 1945 was overthrown by a coup in 1954. After discussing Guatemala's political ills and the historical lack of "inclusive institutions", it gravely omits then to make the slightest discussion as to the 1945 overthrow.

For this omission one must read the likes of William Blum. At least some background references to the possible reasons for the knocking down of the Guatemalan democratic government should be at least hinted/ referenced: for example the "coincidental" CIA involvement in Guatemala from 1953 to 1990's, or the fact that the democratic government of Jacobo Arbenz had nationalized the US Firm United Fruit Company.

Conclusion:
- Solid book, with a welcome view of the correlation between politics and economics.
- Some serious omissions. The book feels scrubbed clean of politically incorrect/ miss-matching data. For example a perfect void for Guatemala's 1954 coup on it's democratic government.
- However despite some gaps it is a must read for all interested in economics/ development/ politics.

Helpful to Most, Can Be Summed Up as Integrity & Clear Feedback Loops

Robert D. Steele (Oakton, VA United States) –

There is no question but that this book is a major contribution to the current dialog, such as it is. As someone who reads a great deal, I have finally come to the same conclusion as Will Durant, Buckminster Fuller, and Russell Ackoff:

INTEGRITY is the one word that matters. If organizations, including political organizations, have INTEGRITY, the nation prospers. If they do not, poverty prevails. INTEGRITY is about much more than personal "honor." It is about being able to see the whole, connect the dots, achieve rapid constant open feed-back loops among all elements of the complex system, and so on.

Nations fail when education is reserved for the elite, and the elite lose their INTEGRITY. When the burden becomes too great and the masses rebel, they can either re-create the corrupt system they are bringing down, or they can branch toward a system of systems where INTEGRITY prevails.

Below are a few of the books (my limit of ten) that I recommend in support of this book and the larger question facing all of us: just how illegitimate is the US Government and the two-party tyranny that is helping Wall Street loot the entire country, not just the Treasury, and what are we going to do about it?

Philosophy and the Social Problem: The Annotated Edition
Critical Path
Ideas and Integrities: A Spontaneous Autobiographical Disclosure
Idealized Design: How to Dissolve Tomorrow's Crisis...Today (paperback)
The Next Catastrophe: Reducing Our Vulnerabilities to Natural, Industrial, and Terrorist Disasters (New in Paper)
Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History
Out of Poverty: What Works When Traditional Approaches Fail (BK Currents (Paperback))
A More Secure World: Our Shared Responsibility--Report of the Secretary-General's High-level Panel on Threats, Challenges and Change
High Noon 20 Global Problems, 20 Years to Solve Them
The Tao of Democracy: Using co-intelligence to create a world that works for all

Best wishes to all,
Robert Steele
THE OPEN SOURCE EVERYTHING MANIFESTO: Transparency, Truth & Trust

Compelling insight into how countries succeed and fail,

Matt -Why Nations Fail takes a topic over which much ink has been spilled - why some nations succeed and others fail - and distills it into one overriding theme. Nations rise and fall based on their political institutions.

There are, from the authors point of view, basically three types of countries. First, those in which there is no strong central government. These are the most extractive (people's property, freedom and ideas are always in danger of being taken away) because without a central state, there is no rule by law and there are few paths, except by force, by which a person can turn their ideas and talents into money. Somalia is an example of this first type of country.

The second type of country is that in which there is a strong government, but the institutions that are in place allow for only a few elite to rule. This type of country is also very extractive, though not as extractive as the first type. Rulers are able to rule by fiat, placing their own interests above that of the people. The most enlightening example of this, is how the Ottoman Empire decided against legalizing the printing press for many centuries. The printing press would have allowed for a flourishing of ideas, as it had in Europe, but allowing new ideas the Ottoman rulers knew, destabilizes the current order, of which they were a part. The printing press also would have destroyed the profession and the prestige of the scribe profession. Merchants and printers would have become a new prized class of people, and with continued economic success would come political success, which would destabilize the power of rulers. Current day governments that fit this mold are North Korea, and many poor African states. To a much lesser extent, China also could be classed in this category.

The final type of country is those with a strong central government, but whose institutions allow for a wide array of voices to be heard. The authors make the argument that no country had embraced the this type of government - with ancient Venice and Rome coming closest - until England after the Glorious Revolution in 1688. England still had a king, William of Orange, but he was constrained by many other people, with a variety of competing interests. At this point the modern version of democracy was far away, but here was finally a government in which multiple perspectives were embodied. This political revolution was followed by an industrial revolution because creative destruction was free to thrive. Instead of the powerful protecting their own interests alone, a more representative government meant people were free to monetize their ideas and therefore create and invent stuff that would drastically improve society. Today, the US, Japan, South Korea, Botswana and western Europe could be included in this third type of country which the book term "inclusive."

It is always difficult to jump from one of these types of countries to another type. Too many people have too much invested for change to readily occur. That's why China is, for the forseeable future, likely to remain an extractive institution. And it's why many African nations seem to be in a perpetual vicious cycle even after they have revolutions to introduce more freedoms into society. But it's also a reason why American success has been relatively stable.

I thought the argument the book makes was persuasive. The book covers many time periods and countries, preferring a panoramic approach rather than a single case study. I thought that was a wise decision because they were able to show that the dynamics of government that lead to success or fail are usually very similar no matter what the geography, the period of time, the culture or religion in that country are. That said, I do think may have too easily dismissed other potential influences on national failure or success, like that of culture. Early in the book, for instance, they mention the caste system of India as a potential societal influence on national success. But they only spend a few paragraphs on it, quickly dismissing it in favor of the political institution theory. They could have been more informative in making the case against some of the other theories that propose to explain why nations fail. This drawback is slight however. Overall it's a fascinating, thought provoking book, and it's compelling in its powerful but simple thesis.

Great, Important, & Interesting-- Best Modern Econ Book,

N N Taleb "Nassim N Taleb"

This is the best contemporary economics books I've read so far. a) There is a central point, b) The central point is clear -a version of the Golden Rule of symmetry and exploitation, c) It is convincing. Some agents try to exploit the system and others, other agents contribute and make it grow.
Some reviewers nitpick here and there but the idea is loud and clear. After reading this book I started looking at countries & development in a different way.

Nations - will ours still work?

Wayne Crenwelge "teacher" (Texas) –

"Why Nations Fail" by Daron Acemoglu and James A. Robinson (2012). Why I thought this book would be helpful was because I have been thinking these thoughts about my country....i.e. will my country fail? It seems the entire world is in turmoil and lots of us would like some answers.

What I found is a nicely summarized book into the institutional causes of economic success/failure at the national level. The really cool thing is there are not all these charts and graphs that I remember from college Economics. With the exception of a Supply and Demand chart, most charts and graphs just confuse me. The authors attempt to tell their story in a narrative voice. Quite interesting. At times it is a little disjointed and there is some repetition, but I do not think it takes away from the overall point.

Their point....Expose how governments create various monopolistic businesses to enrich those in favor with their government. The authors answer the question of why nations fail as a problem of political policy. All nation's political decisions create either economic institutions that are extractive or inclusive! Extractive policies reign supreme in countries like North Korea or many of the former British colonies. Inclusive policies are in place in United Kingdom, USA, South Korea, and Australia. Extractive nations just take. Inclusive nations create inclusive economic institutions that enforce property rights, create a level playing field, and encourage investments in new technologies and skills.

The authors specifically challenge other theses. 1) Geography is destiny. Na. 2) Culture is destiny. Sorry no. Both are explained with the Korea's....geography and culture.....the same.....the result.....one place is hell and the other is full of prosperity. 3) History is destiny. Wrongo. Australia was colonized by British convicts.....the dregs of their country. Flash forward to a vibrant country. 4) Just plain ignorance. Ha right! The leaders simply don't know how to make their countries wealthy. The party elite of most of Africa or say North Korea have lots of money. Their people don't. Those in power merely maintain a standard of living exclusively for themselves even at the cost of the extreme suffering of their people.

I like the book. I have a better feel for my country based on Daron Acemoglu and James Robinson's compelling ideas. From the dawn of time man has moved forward towards a greater standard of living. It seems the respect for the rights of the many is the key to move forward.........toward a total inclusiveness. This book is cutting edge right now because there are some major decisions that need to be made.....soon. The best economics and political science book I have read in 15 years.

A major step forward in Economics, and easy to understand,

David Field (Groveland, MA USA) –

If you write a book on World Economics, it says a lot if five of the blurbs are from winners of the Nobel Prize for Economics.

It also helps if you don't publish your theory in a learned journal, complete with plenty of math.

And if you produce your theory in an easy-to-read book that makes your point over and over again, you have a winner - maybe even your own Nobel Prize.

And here is that winner. I know I've been somewhat gushing about books lately, but this is the best one so far - this year, this decade, this century. So what's it about?

Authors Acemoglu and Robinson have taken on the vexing question of why some nations are prosperous and others not. They point out that there are many similar societies around the world, and that development should be similar in each of them. But the early examples - North and South Korea, and Mexican Nogales and U.S. Nogales - show that there is a vast divide between apparently similar peoples. They attribute this to certain man-made institutions in each country. What has made these differences hard to see has been the focus on politics. Is Capitalism better than Communism? Do revolutions and coups make everything right? These aren't the questions to ask.

The authors have made an intense study of many nations around the world, and they can show that the success or failure can be traced to the author's theory. They find that most countries are either extractive or inclusive societies. Extractive societies try to concentrate the wealth among the powerful, and even communist leaders can live the good life while their citizens starve. Inclusive societies try to engage as many groups as possible to share power, without creating an elite.

People in the U.S. live in a society that is mainly inclusive. Most Americans would agree that if you study hard and work hard you can get on in life. The state can't come around and take away what you have. You can start a business and make billions from it, if you are lucky. You can innovate and get a return for your processes and inventions. That isn't the case for everyone here, but it's what drives the country.

Or take an extractive society. Few people have access to education. Communist states suppress demand, and supposed "democracies" often preside over massive inflation. You may not be able to open a business. In agricultural nations there's often a state organization that is supposed to get higher prices for exports of the commodity, yet farmers find that the going rate is going down and down, and is less than what's available in a free market. So why look for better ways of producing your crops? It's simply not worth it.

People have complained that there is too much emphasis on England in the seventeenth century. That's purely sour grapes because I come from there (no, not really!). It's because England gradually moved from an extractive society to an inclusive one. In 1688, a hundred years after the Armada, King Charles II was deposed. But the important news was that England took steps to remove control from the King and his nobles. Over the next two hundred years, the Parliament became supreme, and this was done to make the democracy wider-spread, and not to succumb to the interests of the rich. So when the Industrial Revolution started, the steam engine wasn't a curiosity, like it was to the Greeks in the first century A.D., where there was enough free energy from slaves. Also in Britain, the aristocracy didn't fear the loss of power or money as much as in feudal countries.

I'm sure Karl Marx thought that Communism would solve the world's problems, but although the Soviet Union rose to be an industrial power, the strong control of the state led people to fix targets that were easily reached, and there was little incentive for innovation. So even with the supposed equality of everyone, the country couldn't maintain growth. So it's sad that the authors review Uzbekistan, an ex-satellite country of the Soviet Union, and show that the "free" people are subject to the same restrictions.

The most egregious examples come from Zimbabwe, and the reign of Robert Mugabe, who came to power by driving out the white minority rule of Ian Smith. At one point the national bank ran a lottery; the qualification was to keep $1,000 in an account for a month. The winner, on a "random" draw, was - Robert Mugabe. There have been constant allegation of vote-fixing in elections, and most people seem to expect Mugabe as a dictator.

But not all the news is bad. In Botswana, with its lack of natural resources in the 1800s and most of the 1900s, the British won control but did little to expose their rule, because there was nothing to exploit. After independence in 1966 the country was poverty-stricken, but the new rulers established a country where the leadership was nation-based rather than tribal-based. Then with the discovery of diamonds, Seretse Kharma proposed that mineral rights should also be the property of the government, so all Botswanans would benefit. That's led to Botswana having the standard of living equal to a typical Eastern European or Central American country, far better than any of the original colonies.

The best news comes from Brazil, where the Worker's Party has gradually taken over the country. They did this by approaching diverse social movements within Brazil to form a broad-based party, and the Worker's Party has encouraged these movements to play a part in deciding policies. Brazil is now the seventh-largest economy.

The world is full of quick solutions that turn out not be as simple as people had hoped, but the idea of extractive versus inclusive organizations seems to work over a vast range of countries over long time-scales. Some people here have criticized the (rare) errors of fact, but even if these had been fixed the argument would still have been extremely effective.

What this book gives us is a blueprint for progress. Up till now we've struggled to find a way forward with numerous plans being advanced, but this is the first book I've ever seen that covers such a wide range of governments and history to prove its point. Countries around the world, with apparently little in common, conform to its arguments.

So, I urge you to read this book. Whatever your political persuasion, it will tell you something that you don't already know. The rights you have today, wherever you are, need to be constantly checked to make sure that they're not eroded. Extremes of left or right are dangerous, and bear in mind that just about all the political parties in Europe, for instance, are to the left of the Democrats in the U.S.

So, it's easy enough to read, it contains important truths, and has earned the respect of the best minds on the subject. Get it today.

History is not destiny,

Steve Reina (Troy Michigan)

So say Why Nations Fail authors Daron Acemoglu (Economics Professor at MIT and 2005 John Bates Clark Medal recipient) and James Robinson (Harvard political science and economics professor).

According to Acemoglu and Robinson what answers the question of why nations fail is one of political policy, to wit: are your nation's political economic institutions extractive or inclusive? By extractive the authors point out countries like North Korea or many of the former British colonies (both before and after independence). By inclusive the authors point out countries like North Korea and other nations created inclusive economic institutions that enforced property rights, created a level playing field and encouraged investments in new technologies and skills.

As Acemoglu and Robinson point out understanding why nations fail often requires a review of recent and not so recent history that is nation specific and focused on whether its particular history supported inclusiveness or suffered exclusiveness.

As part of advancing their thesis, the authors specifically refute other theses. One of these refuted theses is that geography is destiny. Readers familiar with Jared Diamond's books Guns, Germs and Steel and Collapse may recognize the argument that countries from certain climates were destined for predominance over their less ideally located peers (a sort of economic "location, location, location" theory). Acemoglu and Robinson pour water on this theory by examing the case history of Korea which was united until just after World War II. Despite a common shared geographic, linguistic and cultural history up to that point, "somehow" South Koreans now outearn their northern neighbors at a rate of 400 to 1.

Another these the authors dispute is culture which is also addressed by the Korean example and less significantly perhaps by the case history of Nogales Arizona/Nogales Sonora (the city is bisected by the Mexican US border). As with Korea Nogales had a common history up until it was taken over during the Gadsen purchase. As with Korea standard of living is radically different based not on culture but rather arbitrary border placement.

Finally the authors dispute the ignorance hypothesis. This one says that some leaders simply don't know how to make their countries wealthy. Here again, an examination of the personal wealth and living standards of the Communist Party elite in North Korea fail to show any unfamiliarity with how to acquire money. Rather, the oppressive conditions in that country testify to the intensity of the desire on the part of Korea's rulers to maintain that standard of living exclusively for themselves even at the cost of the extreme suffering of their people.

More than refuting other theories, however, the authors take readers on a world wind tour of global history from the perspective of economic inclusive. From my perspective whether you ultimately agree with the rest of what they say, this tour itself is alone worth the price of this book.

But in this case, it's likely the authors are actually making a compelling case because it also happens to be the right one. From the axial age forward, every step towards a greater standard of living has always seemed to follow in the wake of a greater respect for the rights of the many...not total inclusiveness perhaps but greater inclusiveness to be sure. As Acemoglu and Robinson alluded there are indeed many details to be filled in but as a start I think this book makes for both provocative reading and cutting edge economics and political science.

Erudite, ever so meandering, and ultimately inconclusive...,

John P. Jones III

I find the topic utterly fascinating: why do some nations prosper, and improve the life of their citizens, and others fail, often disastrously so? Daron Acemoglu and James Robinson, both academics, propose a model based on the concepts of "extractive" vs. "inclusive" institutions. They attempt to support their thesis by undertaking a very broad review of economic and historical developments in a spectrum of 30 or so countries. They commence, like medical researchers do when they hope to minimize the number of variables, by examining "twins." In the author's case the "twins" are the cities of Nogales, immediately adjacent, in Arizona, and in Sonora. One is relatively prosperous, the other not so. It is a good start, and later in the book, the author uses the two Koreas. In both cases, geography and culture are relatively constant, which seems to bolster their view that it is the "institutions" that govern the lives of the respective citizens that are causative.

However the book can be a bit of a maddening slog in order to find some enjoyable nuggets of information and/or wisdom. For sure, if one establishes a situation in which individuals have incentives to produce they will work harder. So, why is this concept not universally embraced, by corporations and countries? I once set up a "profit-sharing" program for workers in my company; it seemed to change attitudes, improved the operating efficiency and reduce waste. After I left, the owner immediately eliminated it, though he would pontificate on the needs for economic incentives for himself! His outlook was rigid: if he was "sharing" the profits with the workers, he was a loser, and the thought that he might have a slightly smaller percentage of a much bigger pie never entered his mind. The authors confirmed my personal experience time and time again, and expressed it in terms of "The Iron Law of Oligarchy." An elite would be deposed by "revolutionary forces," only to see those forces turn into a new elite who acted much the same as the old. Among others, the authors cite Ethiopia as an example, where "the Derg" deposed Haile Selassie in 1974, and within four years Mengistu was using the same throne Selassie did. The authors could also have cited George Orwell's Animal Farm: Centennial Edition. I also found the authors description of how Venice turned into a "museum" to be one of their most concrete examples, in terms of identifying the steps taken by the elites to protect their interests, and eliminate the "profit sharing" with the masses. Likewise, as a counterpoint, there was a good description on how Botswana became the most prosperous country in sub-Sahara Africa.

For sure, I believe the "differential diagnosis" to be essential, and therefore comparisons of one historical situation to another can be most useful. But the authors seem to have taken this concept to the extreme, juxtaposing wildly disparate situations, and providing no "connective tissue." For example, chapter 6 contained 10th-12th Century Venice, the Roman Empire, and Axum, in Ethiopia, without any meaningful comparisons. Over and over again the details of the history of a country were included, generally correctly, but for no apparent reason in terms of supporting their thesis. Thus, we are treated to a catalog of Napoleon's military successes, the number of tons of gunpowder the British sold between 1750 and 1807, and Roosevelt's efforts to pack the Supreme Court. And I dare say that if the redundancies were eliminated by a good editor, a hundred pages would be shaved off the book. For example, three times in 50 pages there is the same list of African countries that had descended into civil war; the Battle of Adowa is mentioned at least twice, and there is the relentless mantra of using "extractive" to mean anything bad that is occurring in a country, and "inclusive" for positive developments. There are also the outright errors of Bill Gates' education (p.43) (Gates dropped out of Harvard in his freshman year), and the circulation of the French "Old Franc" until 1992 (p. 388).

And then there were the sins of omission. Several readily sprung to mind: all of Scandinavia, Singapore, Malaysia, Dubai, and Canada. Examination of these would have provided some useful counterpoints to one of the author's concluding propositions: "You can't engineer prosperity." And where is the rise of "extractive" institutions in the United States over the past 30 years? Totally omitted. Reviewing the extensive bibliography/references was also instructive. There was Kapuscinski's classic account of the fall of Haile Selassie, The Emperor but I was astonished to find missing Gunnar Myrdal's equally classic inquiry into the poverty of nations Asian Drama: An Inquiry into the Poverty of Nations.

It is a rich book, which covers a vast swath of human history. But it lacks the "connective tissue" that supports the author's thesis, and thus remains light-years away from any sort of "unified field theory" of development. 3-stars.

Addresses only part of the issue.

M. L Strickland (Marietta, GA USA) –

I have mixed feelings about this book. The biggest issue is that I believe that while its conclusions are sound, there are other important factors that are not adequately considered

Essentially, to simplify the premise, the authors demonstrate that the difference between successful and failed nations boils down to governance. Whether the government is "inclusive" or "exclusive" in the sharing of power, wealth and opportunity. This is pretty obviously a sound conclusion and I think the authors do a good job of making their case.

What I am concerned about though, is that most situations are not so clear cut. There is a continuum of governmental "styles" with the current trend moving toward being less inclusive regarding the opportunity to produce prosperity and more toward being "entitlement" oriented. What happens to a nation when the governments takes on a Robin Hood role? Won't a nation also fail if there are fewer and fewer individuals producing prosperity and more and more who are consuming instead of producing?

The conclusion of this book is good. It just doesn't go far enough to be of any help in today's society. It does explain the problems in many third world nations but does not address the industrialized world. As such it is a very interesting academic exercise with insufficient relevance to today's most pressing issues.

Important themes, with blind spots

Ryan "Gen-Xer, software engineer, and lifelon... (Somerville, MA, United States) –

Acemoglu and Robinson's central thesis isn't hard to understand: countries with inclusive, equitable political and economic institutions tend to prosper, while those with extractive, exclusive institutions geared towards the interests of a small elite tend to languish. The authors minimize geography and culture as significant factors in the equation, pointing to nations where those realities are similar but political systems vary.

The dynamic exists, the authors maintain, because the interests of an exploitative elite and those of regular citizens are usually in conflict, so the elite must actively block democratic movements, workers rights, unions, property rights, innovation, etc. in order to maintain a hold on power. In more inclusive systems, meanwhile, there is a virtuous circle effect, in which opportunity breeds motivation and meaningful choice, while making it hard for anyone to consolidate too much power over others.

It's a strikingly simple hypothesis -- a little too simple, I think -- but the authors back it up with a wide set of historical cases, ranging from post-Renaissance Europe, to the colonial Americas (noting the different approaches taken by English and Spanish settlers in controlling their territories), to post 17th century Britain, to the United States (monopolies and trusts are discussed), to the Arab world, to the Soviet Union, to modern Africa, to North versus South Korea. Even if you more or less accept the book's ideas, the details are still informative. If you're not familiar with the political differences between imperial Spain and England, they cast quite a bit of light on the separate paths taken by the two former world powers -- and their former colonial possessions. Similarly, you don't appreciate what apartheid meant for South Africa until you've contemplated just how the system was structured to impede blacks from becoming more than cheap sources of labor. As was a problem in the US, too.

The examinations seemed politically balanced. Communist governments taking a drubbing, and the authors argue that China's rapid growth as orchestrated by Bejiing is unlikely to be sustainable unless the Party relinquishes more of its grip. But Acemoglu and Robinson also pay attention to how capitalist monopolies undermine democratic ideals, as do weak or corrupt central governments that lack the power to enforce laws and protect individual rights.

The book has its blind spots, though. I simply don't agree with the authors that geography doesn't matter. Most wealthy countries, it seems to me, have inclusive systems, but were also blessed in resources, either obtained locally, or extracted from some other region. It's easy, for example, to see a country like the Netherlands as owing its prosperity to a liberal democracy that overcame a lack of natural gifts, but that's not the whole story. The Netherlands got started on a path to prosperity because it set up exploitative trading companies during the colonial era and eventually reallocated the wealth into new ventures. Being "inclusive" at home or among upper classes doesn't mean the same was true abroad or among lower classes. I also think that geopolitics is underrepresented as a factor in Why Nations Fail. South Korea and Israel might be successful countries in spite of tough landscapes, but both enjoyed massive military and economic support from the United States, enabling technological economies to flourish. It's not that a country like Zimbabwe has no chance of becoming a technology center, but it would have to find a way to produce skilled workers who can compete in the global economy, without being tempted to emigrate. Creating an educated population has significant start-up costs, even with the best of intentions.

All in all, the ideas that Acemoglu and Robinson promote are important foundational ones, but should be considered with their blind spots taken into account. Readers interested in history for its own sake might enjoy the case studies; if not, the themes are pretty repetitive.

Interesting but Simplistic

Ginny (El Paso, TX) –

This book is interesting, but its major argument is simplistic. Daron Acemoglu and James A. Robinson place the lion's share of the blame for underdevelopment in poor countries around the world on the adoption of bad governmental and economic institutions. The path to progress, they argue, is to have good institutions; the path to failure is to have bad ones. While there is truth in such a proposition, it is nonetheless highly misleading. Let me explain. I doubt than anyone would disagree with the notion that to have healthy populations countries need good health care systems (doctors, clinics, hospitals, pharmaceuticals, etc.), and to have an educated citizenry countries need good educational systems (teachers, schools, universities, research laboratories, etc.). The real issue is how poor countries get the highly desirable health and educational systems. The harsh reality is that such systems or institutions are not easy to acquire. This is not simply a matter of choice, as Acemoglu and Robinson seem to suggest. If it were, then practically every country would have healthy and well-educated populations, and most do not. The reason is that good health and education infrastructures require robust revenues; robust revenues spring from prosperous economies; and prosperous economies ultimately derive from favorable circumstances in the spheres of external relations, the environment, natural resources, population dynamics, and governance. The same holds true for good governmental and economic institutions--to obtain them countries need strong foundational contexts. Acemoglu and Robinson ignore the fact that mal-functioning institutions and sputtering production processes in many poor countries are directly linked to problematic climates, geography, and resource endowments. These authors also discount the enormous problems faced by tropical areas growing food and maintaining healthy populations in the face of deadly diseases that thrive in hot and humid climates.
Acemoglu and Robinson begin their book with a reference to the U.S.-Mexico border, pointing to the differences in living standards in Nogales, Sonora versus Nogales, Arizona. The Mexican side, they say, is poorer than the U.S. side because Mexico's institutions do not work as well as those in the United States. It is a fact that Mexico is less prosperous than its northern neighbor and that it has weaker institutions. But to conclude that those weaker institutions account for Mexico's profound economic problems is a mighty stretch. To back up their claim that Mexico is just another country that has foolishly passed up opportunities to adopt good institutions, Acemoglu and Robinson recount select historical events and what they believe to be mistaken decisions by Mexican leaders. Anyone who knows the history of Mexico well, however, will quickly see that Acemoglu and Robinson rely on cherry-picked and un-contextualized history. These authors cite fragments of the past as their major source of evidence not only for Mexico, but for numerous other countries as well to make their grandiose case that institutions are the major deterministic causes of underdevelopment. It will be up to historians of all the countries cited as examples by Acemoglu and Robinson to check the efficacy of the history presented in Why Nations Fail.

mediocre work,

Timothy Hutchinson (Austin) –

You don't need to read the whole book, just read the following sentence:

political centralization + inclusive institutions = prosperity

otherwise, even if there is a growth, that is bad.

Once you know this and make a decision not to buy the book, it saves around $18 and your precious time wasted on reading the book.

This book takes an oversimplistic approach to development and is quite ideologically laden...

I'd rather change the title of the book to "A Praise for the Modern Western Democracy and Capitalism".

A detailed world history with a bleak prognosis for poor countries

Preston Smith (Portland, OR USA)

I read this book because I wanted to know more about the poor countries and regions of the world, their nature, and what could done to raise their prosperity. Previously, I had read Jeffrey Sachs' The End of Poverty: Economic Possibilities for Our Time.

Acemoglu and Robinson proceed to build a theory of poverty versus prosperity by providing detailed histories of dozens of countries of both types. Their theory focuses on political and economic systems of each country. According to them, a political system or an economy can be either extractive or inclusive. Extractive, which leads to poverty, means that a small elite group, for example, a dictator, a strongman, the military, the clergy, or just a gang of cronies, makes all the decisions and wields the power. In an inclusive system, synonymous with prosperity, power is shared broadly by the people. "Extractive" refers to a situation in which the elite group extracts resources from the masses, thus making them poorer. Although extractive and inclusive are usually used as black-and-white terms, there is a range between them, as the authors discuss.

Countries become inclusive or extractive due to past events, often centuries in the past. Thus, most of the book comprises fascinating historical accounts of the countries in question. For instance, Britain is inclusive today because of how it reacted to the fall of the Roman Empire (fifth century), the Magna Carta (1215), the plague (1348), the Glorious Revolution (1688), and the Industrial Revolution (eighteenth century). Thus, according to the authors' theory, extractiveness can change to inclusiveness only slowly and only in response to occasional critical junctures of history, which are largely outside of human control.

Moreover, extractiveness tends to follow a vicious circle, wherein an extractive state leads to greater poverty, which causes a more extractive state. In contrast, inclusiveness tends to encourage a virtuous circle, leading to prosperity and even greater inclusiveness.

So this is how this book explains poverty. What does it say about reducing or eradicating poverty? Essentially nothing--a sad conclusion. Because poverty, according to the authors, has long-term roots essentially outside of human control, there is little that can be done about it. The last three pages of the book make a lame attempt, suggesting that open media would help.

In contrast to Acemoglu and Robinson's complete focus on just two factors--political institutions and economic institutions--Sachs assesses dozens of factors in determining the "thumbprint" of a particular country regarding its poverty. These factors can include, climate, geography, governance, ease of transport, economics (hyperinflation, for example), soil and water conditions, local diseases, ethnic differences, and many others. I believe that this approach makes much more sense than trying to boil a complex issue like poverty down to just two basic causes.

Although "Why Nations Fail" appears to be carefully researched, I found two significant instances of sloppiness that cast a shadow on its credibility. On page 409 the authors state, "Today Botswana has the highest per capita income in sub-Saharan Africa . . . ." Income is a vague term that the authors don't define, but if we use the most common definition, per capita gross domestic product (GDP), Botswana is actually number five out of 45 sub-Saharan countries (excluding South Africa), following Equatorial Guinea, Gabon, Seychelles, and Mauritius, according to UN data ([...]) for 2010 (the latest year available).

More serious, on page 49 the authors state, "The theory that hot countries are intrinsically poor . . . is still forcefully advocated by some, such as the economist Jeffrey Sachs." Nothing could be further from the truth. Two paragraphs above I list some of the many factors that Sachs takes into consideration. Sachs' whole thrust is that there are countless potential factors, and they differ for each country. This lapse suggests to me that Acemoglu and Robinson didn't actually even scan Sachs' book. And it suggests that the 18 illustrious endorsers--including six Nobel laureates--of "Why Nations Fail" didn't read this book before they endorsed it.

Unlike most books of this type, this one has no Notes section. Instead, it has a Bibliographical Essay and Sources section, which is so vague as to be useless for fact checking.

I see two uses for this book. First, for those who love history, it provides fascinating histories relating to wealth and poverty from around the world. Second, it would be a great supplement to Sachs' "The End of Poverty." Sachs recommends foreign aid programs, in ample amounts, but for these to be successful, the host government must not be too corrupt or unorganized. Sachs doesn't devote much attention to this topic, so "Why Nations Fail" could contribute to this understanding so as to direct foreign aid to its most useful destinations.

Failed Attempt,

Francis McInerney (Katonah, NY United States) -

This is a not very imaginative attempt to recreate Fernand Braudel's thirty-three year old thesis and it fails for basic lack of scholarship. Not only do the authors appear unfamiliar with Braudel -- hard to get out of undergad without him -- but have never read Harold Innis, maybe the greatest economic historian of the twentieth century. This is kind of like trying to figure out the origin of species without consulting Darwin. Ouch!

Acemoglu and Robinson make a vague attempt on the second last page -- 461, second paragraph -- to rescue the book, but they do not seem to understand what they have written there. Innis would have started with this paragraph and worked forward for 462 pages.

It would have been much easier to do as Sean White and I did twenty years ago in our first book, "Beating Japan." Draw from Innis and say simply that there is an information cost-velocity curve and that if you are on it you win and if you fall off it (or never get on) you lose, usually forever. There is no case of anything that breaks this rule. Winners are always further out on the curve than losers. Darwin would have explained a set of organizational mutations governing this process (as Braudel so famously came close to doing) and Acemoglu and Robinson sort of try to do.

The book's failure is a shame, because it focuses a lot the Revolution of 1688, the birth of the liberal movement and the information cost-velocity inflection point around which so much of our modern world turned, as Braudel was at pains to say time and again. He went much further, however, and showed how the Ancien Régime of Louis XIV failed to adjust, with the result that today, we all speak English and not French.

We put it somewhat differently: liberalism was the result of the British moving further out on the information cost-velocity curve than the French. The rest is history. Today we say that only liberalism can flex with the rate of cloud inflation. And that is what will doom China. And that is also why liberalism cannot be imposed. It is a function of the curve -- the almost got it of page 461 -- and not the other way around.

What the authors also fail to grapple with is the extraordinary success of the anti-liberal Mussolini model. Regimes the world over from Russia and China to Venezuela and much of the Middle East use Mussolini's system to the letter. Not for nothing Hitler called him a political genius. They could simply have said, as we would, Mussolini only gets you so far out the curve before his model runs out of steam. Whence China's conundrum. And our foreign policy concerns there.

A couple of copy editing bloopers. "Systematized," "Napoleon II" (poor chap never saw the light of day), "fear from change," "quite regularly," and my favorite "the Magna Carta."

The Failure of "Why Nations Fail"

macondo

"Is this really the jacket for this book?" I cannot help but reading the praises of book again and asking this same question when I was 1/4, 1/2 and then 3/4 done with it.

This book is not half baked - it is not baked at all. It is rather thick, with tons of stories, comparisons, all trying to support - well, support what? Supporting a theory basically saying "what sounds good to us is good", while what the first "good" really means was very vaguely mentioned or described, but NOT well-defined.

It is a book suffers tremendously from over-simplification and over-generalization of complicated issues. The authors must have realized this, and tried a few times to even distance themselves from their baby, basically stating that their theory would not work that well since there are other variables.

Was Steven Levitt, whom I do enjoy reading, being tongue-in-cheek when declaring this book "brilliant in its simplicity..."???

Omits Human Biodiversity,

Viewer (Australia) –

It's amazing that a book can be written by serious academics that completely ignores the role of human capital and particularly what Bruce Lahn & Lanny Ebenstein refer to in Nature, as Human Genetic Diversity. Especially given recent books such as 'A Farewell to Alms', 'The 10,000 Year Explosion: How Civilization Accelerated Human Evolution' and particularly 'IQ & the Wealth of Nations'.

There is a growing body of research by the likes of Eric Weede, Garrett Jones, W. Joel Schneider, Heiner Rindermann and Rati Ram on the importance of national cognitive ability on economic prosperity. You can look at PISA or TIMMS results in addition to the Lynn & Vanhanen data.

Yes, institutions are important. However, as economists from Africa, Isaac Kalonda-Kanyama of the University of Johannesburg and Oasis Kodila-Tedika of the University of Kinshasa, note in a new study entitled "Quality of Institutions: Does Intelligence Matter?"

"We analyze the effect of the average level of intelligence on different measures of the quality of institutions, using a 2006 cross-sectional sample of 113 countries. The results show that average IQ positively affects all the measures of institutional quality considered in our study, namely government efficiency, regulatory quality, rule of law, political stability and voice and accountability. The positive effect of intelligence is robust to controlling for other determinants of institutional quality."

By not confronting this body of research the authors are not going to accurately identify the causes of why nations fail. In the future perhaps genetic research will identify ways to boost the proportion of people in the smart fraction to improve these institutions.

Acemoglu and Robinson apparently aren't interested in those types of answers. This may be sensible to avoid controversy, but as academics in search of why the world is they way it is, they need to look at the evidence in an objective manner. Without an understanding of reality accurate predictions are impossible.

Another point, is that Daren Acemoglu sees global inequality as a legacy of colonialism. Would non-European societies have continued onward and upward had it not been for the great European expansion that began around 1500 AD?

These questions have caught the interest of another economist, Michael Cembalest, who has charted per capita GDP in different world regions over the past two thousand years (Thompson, 2012). His conclusion? Europe, and Western Europe in particular, had already overtaken the rest of the world by the year 1500. The relative poverty of the non-European world cannot therefore be due to European colonialism. Instead, the arrow of causality seems to run in the other direction. Europe was able to expand into Asia, Africa, and the Americas because it already had a lead over those regions socially, economically, and technologically.

Acemoglu is right in saying that failed states suffer from ruling classes that seek to plunder wealth rather than create wealth. He is wrong, however, in seeing such rapaciousness as a perverse result of European colonialism. This mentality actually used to be normal among elites throughout the world, including those of Western Europe.

All states originate in warrior bands that seize power with a view to plunder and self-aggrandizement. In so doing, they seek to keep the plundering to themselves. Rival bands are outlawed, and the use of violence greatly limited. The State thus becomes a means for pacifying society and providing an environment that favors people who create wealth rather than steal wealth (Frost, 2010).

In time, this new economic environment leads to a new cultural environment. The violent male goes from hero to zero. Instead of being a desired sexual partner and a role model for younger males, he becomes a despised criminal to be tracked down and killed. The role model now becomes the industrious family provider. This cultural evolution is described by Gregory Clark with respect to England from the 11th century onward. With the pacification of society and the State's monopoly on violence, successful individuals were now those who would settle disputes peacefully and display thrift, foresight, and sobriety--what would become known as middle-class values (Clark, 2007; Clark, 2009).

This process can lead to steady economic and material advancement. But it can also abort. There is no reason to assume that Europe's rivals would have kept on going onward and upward. In fact, they were developing serious internal contradictions long before Europeans were able to exploit these weaknesses for their own benefit.

In some areas, like West Africa, this cultural evolution stalled during the early stages of State formation, specifically the one where the State imposes a monopoly on the use of violence. Lasting internal peace was impossible because of the large surplus of single males, itself due to a high polygyny rate. For these excess males, war of any sort was often their only means of securing women and becoming real men (van den Berghe, 1979, p. 65).

Circa 1500, the European world began a great expansion that would extend its domination over most of the planet. This expansion was far from fortuitous and seems to have resulted from internal processes that had been under way for some time within Europe itself. By 1500, there remained only two other civilizations of comparable strength: the Ottoman Empire and the Chinese Empire. Both, however, suffered from internal contradictions that prevented a similar sustained expansion. These contradictions were even more evident three centuries later when both empires began to face penetration by European powers on their own territory (Peter Frost 2012).

Why this book fails; at least sometimes

Dalton C. Rocha (Fortaleza, CE, Brazil.)

Here in Brazil, I read this regular book.
The main five greatest points of this book:
1- This book is well organized.
2- This book is very easy to understand.
3- This book tells histories about about twenty famous cleptocrats, such as Idi Amin, Ismail Karimov, Kwame Nkrumah, etc.
4- This book is very fun to read.
5- The main idea of this book is that instituitions are decisive, to the destiny of nations. And this idea is mainly correct.

Even so, I must give three stars for this book, because:
1- This book has many sophisms. About American development, this book claims that American development happened despite American Indians were behind Mexican and Peruvian Indians. Well, Mexico remains deeply linked to the Aztec past and Peru remains linked to the Inca Empire, but United States hasn't any real link to its Indians. The American Indians were mainly exterminated and their culture became over. The Mexican Indians became one important thing of Mexican culture and politics. As an typical example of sophism in this book, there's nothing about Guyana. And Guyana was colonized by England and its instituitions. Why New Zealand became a rich country and Guyana became a poor one, under the same British instituitions? Well, the nature gave a sentence that in Guyana, European ways of life couldn't be replicated, while in New Zealand, they could. Nature, not instituitions, decided Guyana and New Zealand's fates.
2- About "Israel", I didn't found this word in all of this book. The word "Islam" is on page 61. Even so, this book fails when it doesn't recognizes how important is religion to a people's destiny. Religion is the most important of all instituitions, in all places and times. This book compares Mexico and United States, but hasn't any places to compares The Islamic Morocco and Catholic Spain. And never compares Israel with Egypt, Lebanon, Jordan or Syria. Why Islamic Morocco is so poor and Catholic Spain is so rich? Because of their religions. Why Jewish Israel is so rich and Islamics Egypt, Lebanon, Jordan and Syria are so poor? Because of their religions.
3- About Brazil, this book fails many times. See pages 455 to 460.
4- About former Soviet Union economy, this book remains as correct, the KGB's fake that there was economic prosperity in USSR between 1928 and 1970. Nonsense. There was ever failures, corruption and slavery in Soviet Union in this time. Never there was any great economic growing in USSR. USSR's agriculture was ever a calamity and Russian agricultural production in 1913 was more than the double of any Soviet harvest, in more than 70 years of history.
5- The paper of this book has just regular quality.

LOOSE ELASTIC

By Stephen Cooper

I bought this book when I read a favourable review and thought it would be interesting to explore the reasons why some states succeed economically, while others never `take off' and others take flight but stall. I smelt a rat when I started to find that the style of writing is repetitive and circular and when I found some straightforward factual errors.

The authors say that the Spanish Armada was pursued (by the English) `all round the coasts of Britain'. Well no: we stopped pursuing it off the coast of Kent, and it sailed home via the North Sea and the Atlantic because there was no other way back. The Armada was largely destroyed by bad weather, off the West coasts of Scotland and Ireland. Likewise, the authors say - as if there is some significance in this - that at one time England and Hungary were ruled by the same dynasty, the Angevins. Well, it depends what you mean by `Angevin': it was a prolific house; but the Angevin dynasty in Hungary did not come to power until the fourteenth century, by which time we English call our kings `Plantagenets'. They may have been descended from Angevins, but conventionally the Angevins ruled England in the twelfth century; and they were only remotely related to those who ruled in Hungary, Naples, Anjou and Provence.

The detail matters. If you can't get the facts straight, what hope is there for the grand theory?

When you look at the `case studies', the history here is truly crude - almost like Sellars and Yeatman's `1066 and All That', but without the humour. Take English history, which I know something about. The authors place far too much importance on the Black Death of 1381 (feudalism did not come to an end overnight as a result of that event, catastrophic though it was). They accept Geoffrey Elton's account of the `Tudor Revolution in Government', when this was largely discredited by medievalists, almost as soon as it was formulated. They regard Christopher Hill's account of the so-called `English Revolution' of 1640-60 as being the last word, ignoring at least four decades of criticism. They overemphasize the importance of the Glorious Revolution and ignore how English society was between 1688 and 1832 (and beyond), notwithstanding the Industrial Revolution. They constantly confuse `England' with `Britain'.

If the treatment of English history is so brief and sweeping as to be a caricature, it makes me wonder about the history of other countries; and I am very suspicious of the authors' treatment of Japan, Venice and Ancient Rome in particular. With regard to Rome, they take it as read that the Roman Empire declined before it fell; but there is a very respectable view that it simply fell, when invaded by the Barbarians; and the authors detect the seeds of decay as far back as the reign of Augustus. What then of Gibbon's view that mankind's happiest days were passed in the age of the Antonines, in the second century A.D.?

The problem is that the authors purport to be experts on everything and on every age, when in fact they are masters of nothing but a theory; and the theory is so broad and vague as to be almost incapable of proof or disproof. Thus centralisation + inclusive institutions = lasting economic success and prosperity. I think I go along with this to some extent; but the terms are very elastic. What degree of centralisation counts as such? What is meant by `inclusive' or for that matter `extractive'? They may be right about the USSR and China; but I am not sure they have explained why the former failed and why the seemingly inexorable rise of the latter may be an illusion.