Is it because the culture of some nations is inferior to that of others? Is it because the natural resources of some nations are less fertile and valuable? Or is it because some nations are in more advantageous geographical locations? Daron Acemoglu and James A. Robinson argue the wealth of some nations can be traced back to their institutions – inclusive institutions to be precise that enable its citizens to partake in the political process and economic agenda. It’s an argument for a decentralized, democratic control structure with checks and balances to hold elected officials accountable and ensure shared economic benefits. Thus they conclude nations fail when a ruling elite creates extractive institutions designed to enrich only themselves on the back of the masses. More democracy is the answer to our looming political and economic problems according to the authors. Therefore political leaders must focus on the disenfranchised, the forgotten – those who have been left behind. It’s a conclusion hard to contend with.
Altogether, though, this book is disappointing. Among the various economic theories that try to explain the wealth of nations, the authors fail to create quantifiable definitions for their premise. By failing to define inclusion and extraction the reader never learns about required elements, political structures and economic (minimum) metrics that can be measured or produce reliable data. Instead the authors appear to cherry-pick historic examples to demonstrate the perils of extraction and highlight the benefits of inclusive institutions. Throughout the book this reaches an absurd level of comparing contemporary nations with ancient nations without regard to (then) current affairs, social cohesion, trade or world events. This creates a confusing storyline jumping through unrelated examples from Venice to China to Zimbabwe to Argentina to the United States. I found the repetition of their inclusiveness and extraction argument quite draining for it seems to appear on every page.
Why Nations Fail is an excellent history book full of examples for the success or failure of governance. The stories alone are well-researched, detailed and certainly a pleasure to read. However the author’s explanation for the economic failure of nations is vague and conjecture at best. They fail to answer the origins of power with quantifiable evidence and how prosperous (or poor) nations manipulate power. Altogether this book would have been awesome if it were reduced to a few hundred pages and less repetitive.