Review Of The Book Why Nations Fail

Daron Acemoglu along with James Robinson, are co-authors of “Why Nations Fall: The Origins for Power, Prosperity & Poverty”. American-born economist Daron Acemoglu is the “Elizabeth & James Killian Professor of Economics at Massachusetts Institute of Technology.” He graduated from York University in 1989 with a Bachelor of Economics. In 1990, he received a Master of science in mathematical and econometrics. Finally, his PhD was earned in economics. It was also from the University of York. He is affiliated to various institutes and research centers like the Center of Economic Policy Research and the European Economic Association. James Robinson received his Bachelor of Science degree at the London School of Economics and Political Science. His Master’s degree was from the University of Warwick. Finally, he earned his PhD at Yale University. Robinson has held many positions. From 2009 to 2011, Robinson was the member of the board for the global Development Network. He was also the Wilbur A. Cobb Professor of Government at Harvard University. Daron Acemoglu, James Robinson, and I believe they both are distinguished, outstanding and highly qualified economists. They have both had rich educational and career experiences. They have also received numerous awards and fellowships. This book was first published in 2012. Because it is an original edition, it cannot be updated and can be used today to evaluate and interpret international issues. The book was republished in a second edition in 2013. Its cover was changed, but the content and chapters were the same.

“Why Nations FAIL: The Origins of Power, Prosperity, Poverty” a book with a lot of insight and hope that answers the question, “Why do some nations succeed while others struggle?” The authors showed throughout the book that this question can be answered primarily by “political, economic, and manmade institutions”. I don’t mean geography or culture as the best answer to the above question. It is the institutions’ development and connections with the success and failure of different societies and nations. The authors began their introduction by explaining the impact of elite rule on the advancement or decline of many societies. Egypt was the perfect example to illustrate this point. This particular example was contrasted against how the overthrowning of elites from high-ranking positions led to economic prosperity, new political rights, and other opportunities that have allowed countries like Great Britain or the United States to become major power. The book can be divided into four main parts. The first is about the main examples. The second can be called “the refuted hypotheses”. The third will be about institutions and the differences between the two major scenarios. To make the first half of the book understandable, the authors presented two main examples. The first example focuses on two stories about the same place, “Nogales”. The second example is about the famous “North Korea against South Korea”. Both these examples demonstrate that there are 2 sides to the same coin. The wealthy and prosperous side (such as Arizona, Nogales or South Korea) is a more stable and prosperous place. It is where people are poor, lack development, and live in poverty (such as Nogales Sonora or North Korea). The second part of the study was a discussion about the three dominant hypotheses and theories used by the authors to explain the differences. They later realized that their inefficiency. The geography hypothesis claims that the great divide between rich countries and poor is due to geographical differences. It also blames harsh climates and tropical catastrophes. The culture hypothesis, the second, states that there’s a strong relationship between culture and prosperity. This can also be determined by the productivity based on the religious, normative or ethical characteristics of the population. The third and final hypothesis is the “ignorance thesis”. This hypothesis states that there is a strong link between prosperity and culture. Economists and scholars often claim that this hypothesis asserts that poverty can be eliminated if poor countries have better economic strategies and devices. Both the authors discovered that each one of these claims and theories was flawed. The authors suggested that North and South Korea’s differences and those of Nogales and other parts around the world could not be explained with geography, culture or ignorance. The authors believed that the key to explaining economic growth over the ages was in the institution differences. The authors imply that the differences in wealth and poverty between nations are caused by the existence of different political systems and institutions. The second argument will lead to the third, which will be about the role and implications of institutions. Acemoglu, Robinson began their argument with a series of historical events and examples. They also highlighted the critical junctures and helped shape the economic and political institutions. This allowed them to present a better theory about the origins of inequality in prosperity and poverty. We should now ask the question: What are the different economic and political institutions that cause these differences in international systems?

The authors suggested that economic and political institutions have a symbiotic relationship in order to answer the question. To help readers understand the reasons for diverging development pathways of countries, they also offered two scenarios. The “virtuous circular of prosperity” first scenario includes “inclusive” economic and political institutions. We can use the United States as an example. The virtuous cycle is built on several major mechanisms. First, pluralistic institutions of political power make it difficult for one person to take control of the country. This makes it more difficult to have one major figure usurp the power. This will encourage the growth of democracy and the lowering of dictatorships. The second is inclusive politics, which promotes the expansion of inclusive economic structures that “enforce and protect property rights, create equal playing fields and encourage new technologies and skills investments, which are more conducive toward economic growth”. The “vicious circle” is the second scenario. This scenario includes both “extractive” economic and political institutions. It can be used to explain the two first examples, North Korea and Nogales. These vicious circles are based on several key characteristics. There are two sides to this vicious circle: one, the extractive institutions of politics “which concentrate power in a handful of people, who will then be motivated to create and maintain economic institutions for their benefit, and to use the resources they receive to secure political power.” On the flip side, these “extractive” institutions increase power inequality and unconstrained control which in turn increases the potential stakes in politics. The vicious and virtuous cycles of this analysis can be summarized by saying that inclusive institutions will create positive feedback loops which will enable these institutions become more persistent. However, extractive institutions are always incompatible with progress.

Another important topic that must be addressed and which occupies four major chapters (chapters 7, 8, 9 and 10) is the impact of the industrial revolution on the economy. The English Revolution, or the Industrial Revolution in English economics, was a key factor in the rise of creative destruction. It encouraged commerce and increased prosperity. This industrialization was able to reach different parts, such as Australia and United States. The authors, however, mention that the Ottoman Empire and other absoluteist regimes opposed this industrialization. This helps explain the lack of economic development, literacy and economic stagnation they suffered at that point.

This book is an excellent choice. It will be a valuable resource for international relations theory research. All the topics mentioned are and will continue to be part of the international system. The authors have done a wonderful job answering the questions in the book. They have also clarified and analyzed their arguments which made it very easy to understand and follow. The book does have its limitations. The book’s biggest flaw is its inability to provide sufficient information about how to prevent institutions that hinder development and cause poverty in countries and how to build institutions that make the world prosper. Another big flaw is the inability to point out the limitations of inclusive institutional structures and the fact of sustained growth. The 2008 global financial crash was a prime example. The authors’ explanations of events, theories and manifestations are not supported by academic accuracy, which I find troubling.

This book is highly recommended for international relations students and general readers alike. It is simple to read and uses a straightforward language. It was simple to understand and follow the arguments, and the writing style was clear and concise. This book will make a significant impact on our understanding and perception of the world. The book is objective and provides an overview of the interconnectedness between economic and political institutions. Because of the nature of my field, I will use every chapter and section of this book.