Global Inequality and Economic Growth
In Why Nations Fail, economists Daron Acemoglu and James A. Robinson try to explain the wide gulf between rich and poor countries in the modern world. While other social scientists blame this inequality on geography, culture, or poor leadership, Acemoglu and Robinson attribute it to institutional differences. Specifically, they argue that rich countries have inclusive political and economic institutions, while poor countries have extractive ones. Inclusive institutions represent, benefit, and offer economic opportunities…
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History and Institutional Change
Acemoglu and Robinson argue that the difference between inclusive and extractive institutions explains modern global inequality. But truly addressing this inequality also requires understanding what creates inclusive and extractive institutions in the first place. To better understand this, the authors develop a theory of how institutions transform. They argue that institutions tend to change during periods of historical crisis and instability—which they call critical junctures. Nations respond to these crises differently, and their different…
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Cycles of Wealth and Poverty
Acemoglu and Robinson argue that, although nations aren’t locked into specific destinies, changing the course of history is extremely difficult. Very few countries have gone from poor to rich—or rich to poor—over the last 150 years. This is because both inclusive and extractive institutions tend to get stronger over time. Inclusive institutions give more people economic opportunities and influence in politics, and those people usually use their newfound power and wealth to preserve and strengthen…
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Diversity, Pluralism, and Empowerment
Acemoglu and Robinson admit that Why Nations Fail focuses more on explaining the past than predicting the future. They avoid proposing specific policies because no policy would work in every country. In different nations, the path to inclusive institutions can look wildly dissimilar—or even totally opposite. And even well-intentioned revolutions end up building extractive institutions at least as often as inclusive ones. But the authors do highlight a few key characteristics of the movements that…
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