Daron Acemoglu & James Robinson are well-known economists. They co-authored the book, “Why Nations FAIL: The Origins 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 degree in mathematics from London School of Economics. In 1990, he was awarded a Master of Science degree in mathematical and econometrics. Finally, in 1992, he received his PhD in Economics from the same institution. He is an associate of several research centers and institutes, such as the Center of Economic Policy Research and the European Economic Association. James Robinson received his Bachelor of Science degree from London School of Economics and Political Science. His Master’s degree was from University of Warwick. Finally, he earned his PhD at Yale University. Robinson held several positions: From 2009 to 2011, Robinson was the Board member of the global Development Network. He was also the Wilbur and A. Cowett Professors of Government at Harvard University. Daron Acemoglu, James Robinson, and I believe they both are distinguished, outstanding and highly qualified economists. They both have an extensive education and have had remarkable careers. They have received many 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 one key question, why some countries achieve success while others are stuck in poverty. The authors showed throughout the book that this question can be answered primarily by “political, economic, and man-made institutions”, using both historical examples and their expertise in economics and political history. This is not geography or culture as many think. It’s institutions’ development and connections with the success and fall 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 was contrasted to how the overthrowning of elites from positions of power led countries like the United States and Great Britain to prosper, different political rights, economic opportunities, and helped them to become major powers. 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 main 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. On the other hand, people in poverty are those who lack economic development and living standards. 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 states that there is a great divide between rich-poor countries. It blames poor climate and the occurrence of tropical natural disasters. The second one, “the culture hypothesis”, states that prosperity and culture are closely linked. This can also be determined by the productivity measured by the population’s religious, moral and ethical characteristics. The “ignorance Hypothesis” is the third and final. It asserts that there is world inequality because the rulers of poor countries do not know how make them rich. Many economists or scholars who believe this hypothesis claim that countries will be able emerge from poverty if they have a better economic strategy. Both the authors discovered that each one of these claims and theories was flawed. The authors believed that North and South Korea’s distinct regions of Nogales could not be explained through geography, culture, and ignorance. They believed that institutional differences played a critical role in explaining economic growth through the ages. This is a statement that states that the differences in wealth and poverty between nations and countries are due to the existence of different political systems and political institutions. This will lead to the third portion, which will be about the role and implications of institutions as well as the two scenarios presented. Acemoglu, Robinson began their argument with a series of historical examples and critical moments that helped “shape economic and political institutions” and allow us to develop 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. They also suggested two main scenarios, which help the reader to understand why nations have divergent development paths. The first scenario refers to the “virtuous loop of prosperity” that includes “inclusive” economic and political institutions. Let’s take as an example United States, United Kingdom. The virtuous cycle is built on several major mechanisms. The first is pluralistic institutions that make it difficult for one person to take power. This will encourage the spread and consolidation of democracies as well as the reduction in dictatorships. The second type of political institution is inclusive. It encourages the development of inclusive economic institutions, which “enforce property rights and create level playing fields, and encourage investment in new technologies and skilled that is more conducive for 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. One, there are the extractive political institutions that “concentrate power in the hands a few”, who then have incentives and incentives to keep and develop economic institutions to their advantage and use the resources to secure their political power. These “extractive institutions” on the other side create unconstrained power, a large income inequality, which directly raises the 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, the opposite is true for extractive institutions. They will always hinder and hinder progress.
The industrial revolution’s impact on economic growth and the importance it has for the economy is another important topic to be covered. This chapter covers four major chapters: chapters 7, 8, 9 and 10. 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. These industrializations reached many parts of the world, including Australia and America, which are major powers today. However, the authors refer to the opposition of other absolutist regimes to industrialization. This is what explains the lack of literacy, economic stagnation and lack of development that these regimes faced at the time.
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 book’s question was answered well by the authors. Their argument has been clearly explained and coherently analysed, which makes it easy to understand. The book does have its limitations. The book’s biggest flaw is that it did not adequately explain how to prevent institutions from forming that hinder development and create poverty in countries. It also failed to address how to make institutions that are prosperous for the rest of the world. Another problem is the failure to acknowledge the limitations of inclusive structures and the fact growth cannot always sustain itself – an example being the 2008 global financial crises that impacted major power countries. 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 easy to understand the arguments and follow them up, thanks to the clarity and conciseness of the writing. 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 political and economic institutions. Because of the nature of my field, I will use every chapter and section of this book.
