Brilliant and engagingly written, Why Nations Fail answers the question that has stumped the experts for centuries: Why are some nations rich and others poor, divided by wealth and poverty, health and sickness, food and famine?
Is it culture, the weather, geography? Perhaps ignorance of what the right policies are?
Simply, no. None of these factors is either definitive or destiny. Otherwise, how to explain why Botswana has become one of the fastest growing countries in the world, while other African nations, such as Zimbabwe, the Congo, and Sierra Leone, are mired in poverty and violence?
Daron Acemoglu and James Robinson conclusively show that it is man-made political and economic institutions that underlie economic success (or lack of it). Korea, to take just one of their fascinating examples, is a remarkably homogeneous nation, yet the people of North Korea are among the poorest on earth while their brothers and sisters in South Korea are among the richest. The south forged a society that created incentives, rewarded innovation, and allowed everyone to participate in economic opportunities. The economic success thus spurred was sustained because the government became accountable and responsive to citizens and the great mass of people. Sadly, the people of the north have endured decades of famine, political repression, and very different economic institutions - with no end in sight. The differences between the Koreas is due to the politics that created these completely different institutional trajectories.
Based on 15 years of original research Acemoglu and Robinson marshall extraordinary historical evidence from the Roman Empire, the Mayan city-states, medieval Venice, the Soviet Union, Latin America, England, Europe, the United States, and Africa to build a new theory of political economy with great relevance for the big questions of today, including:
Why Nations Fail will change the way you look at—and understand—the world.
©2012 Daron Acemoglu (P)2012 Random House
"Why Nations Fail is 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, co-author 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 best sellers 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)
Gen-Xer, software engineer, and lifelong avid reader. Soft spots for sci-fi, fantasy, and history, but I'll read anything good.
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 being a liberal democracy, 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. I also think that geopolitics is underrepresented as a factor. 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.
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.
mostly nonfiction listener
I read Why Nations Fail this month while traveling in South Korea. The book was much on my mind as I looked across the DMZ at North Korea on the 38th parallel. South Korea, a country of about 50 million people, enjoys a per capital PPP (purchasing power parity) GDP of around $32,000. (The U.S. is $48,000 by comparison - wealthier but also with a less equally distributed income). In North Korea, the GDP per capita (PPP) is $2,400 - an incredibly low numbers that still probably understates how desperately poor (and hungry) are the people of North Korea.
Why should North Korea be so poor, and South Korea so rich?
The two countries share common cultural roots, geography, and access to natural resources. This is the question Acemoglu and Robinson attempt to answer in Why Nations Fail. They look at examples such as North Korea, as well as other natural experiments of societies that share similar exogenous traits (resources, climate, etc.) - such as the twin Nogales's in Mexico and Arizona.
Acemoglu and Robinson's explanation as to why some nations are poor and others rich has everything to do with the elites. Poor nations are poor because the people who run these countries have made their subjects destitute in service of enriching themselves.
North Korea can best be understood as being run by a criminal family. Mexico is so much poorer than the U.S. because of its history of being run by elites whose main goal was to extract wealth, and who did not need to redistribute economic production as for most of its history the country lacked pluralistic institutions that could check the power of the rulers.
This argument, that some countries are poor because the powerful keep them poor, stands in direct opposition to the arguments that Jared Diamond makes in Guns, Germs and Steel. Diamond believes that the wealth distribution was largely pre-determined by immunity to disease (or lack thereof), access to domesticable livestock, and the raw materials and technologies to make advanced weapons.
I am a huge fan of Diamond's writing, but Why Nations Fail has me thoroughly convinced that more deterministic view of development (as put forward by Diamond and others) is problematic. Why Nations Fail should definitely be on the syllabus in any economic history or development course, and on the bookshelf (physical or virtual) of anyone interested in global inequality, poverty, and why some nations are so much richer than others.
Should you invest the time to read Why Nations Fail? The book is 544 pages, or almost 18 hours by audiobook (my reading choice). Acemoglu and Robinson would have benefited from a strong-willed editor, one who was willing to push them to provide less historical detail (the book has a ton from around the world across numerous societies), and more analysis of the implications of their arguments for countries like China and India.
I came away from Why Nations Fail thinking that if the argument is correct then China's long-term economic prospects might not be as good as we assume, and India's may be better. But having spent time time in South Korea, which developed so rapidly at least partly under a repressive military regime, it is hard to square this conclusion with the recent facts of some of our fastest developing countries.
Perhaps Acemoglu and Robinson next book will take outliers and implications, building on top of the theoretical foundations for development and inequality laid out in Why Nations Fail.
At the top of the non-fiction genre.
This theory, along with those of Diamond and others who look at the end of various nations, go far to explain why an inclusive economy -- one that works for the vast majority -- is the best for preserving a nation over the long haul. I always thought law and order came first in growing a nation's economy, but Acemoglu & Robinson site security of private property as the basic incentive for personal productivity. If you have a stake in how your property is used for income, you have incentive to preserve it for your children. I think this means over paying CEOs and under paying the producers of product/service is bad for the overall economy. Diamond sites environmental devastation as the major downfall of nations. I see environmental abuse as just another way the CEOs and huge companies take value from the system and leave devastation in their wake. These companies look for huge profit now for a small group of top executives and investors instead of long-term economic growth and sustainability for all the employees and their families. If America’s economy fails, it will be on the backs of the leaders of huge corporations and of the political leaders who enabled them.
I am absolutely shocked at the positive reviews this book has gotten, both from people on this site and from professional economists. At its core, this book is nothing but a hodgepodge of just-so stories: every nation that succeeds had something right in its institutions, and every one that failed had something wrong. While there's undoubtedly some truth to this, the authors give very little criteria for determining just what good institutions are, or advice for how they can be fostered. Oftentimes, when economists invade and colonize other disciplines, great things can happen (think education theory); but in this case it's clear to me that two economists (not even economic historians) tried to take on what is really straight-up history, and did a rather terrible job of it. (What on Earth is the story of Pocahontus doing in this book? And the part on the ancient Maya is a joke.) Again, I think there's undoubtedly some truth to the broad *institutionalist* school of development theory. But (one of) the big criticism(s) of the institutionalists is that it's all buzz words, and when things go right credit good institutions, and when things go wrong they blame bad institutions, and they have no concrete understanding of what elements of a nation's institutions matter, or advice for what to do to improve things. A&R do nothing to dispel these criticisms.
Alternative books that cover some of the same ground: If you're interested in development, I recommend "Poor Economics". If you want *big history*, I recommend "Why the West Rules for Now". If you just want cool stories about the colonial period, which is a lot of what A&R spend their 18-hour book on, check out Landes' "The Wealth and Poverty of Nations", strangely not available in audio. I'd like to recommend something on the institutions v. geography, etc. debates that have eaten up development economics, but honestly I don't think there's a good intellectual history out there, and this is definitely not it. I'd say William Easterly ("White Man's Burden") does a little better job at making the thesis relevant, but I'm not a huge fan of him either. And I can't really recommend anyone actually read Jeffrey Sachs. The first chapter in "Poor Economics" goes over things a little.
Authors lay out many examples of what keeps a country from moving up the economic ladder. The examples are well described, from older to more recent periods, and from near and far. A few key themes that helps the reader better understand what drives short term vs. continuous growth. Solid narration too.
'Inclusive political institutions" is a phrase we are already beginning to hear from analysts in the media. We will hear it more. This work manages to weave a historical analysis of major and minor nations into a coherent explanation of economic success and failure. It might just lend new insight into our problems here and now. It has changed my own opinion in important ways.
For anyone who is curious about why wealth and advancement takes place in some countries, while fails to do so in others. The book takes a historic view of economic and political development, contrasts all corners of the globe, and provides rich context. One learns new things and questions long-held assumptions. Critically important reading to understand our world, especially the challenge of raising standards of living for all.
Why nations fail is a fascinating book . I have been intrigued by the distribution of wealth around the world and have been seeking answers. While I picked up jared Diamond's book I dont think I got anywhere close to the answer.
In my opinion this book nails the reason for economic disparity. The key words are pluralism, inclusive, economic, political systems.
While this book nails it; it may not be the right book for you. The authors take several examples and go through each one of them in excruciating details. Now if history is your cup of team then sure you would enjoy this book; else the key messages of inclusive political and economical institutions are repeated throughout the remainder of the book.
One of the best books I've read in years. If you liked Guns, Germs, Steel... you will love this sweeping look at economic history. Enlightening and extremely thought provoking, punctuated by fascinating examples of why nations fail and succeed from all points in human history and across all continents.
Guns, Germs, Steel. Rational Optimist. Ascent of Money.
Well narrated. Great reader.
I have traveled since my youth and have speculated for many years about the reasons that we (USA) have it all and most of the world has so little. Everyone seems to have a ready explanation- tropical diseases, cultural deficiencies, native flora and fauna unsuitable for domestication, environmental devastation, or exploitation of the poor countries by the wealthy ones. Although some of these factors certainly play a role, there are counter-examples that disarm them all in in many cases. I am convinced that this book has an explanation that stands up in just about every case. Further, it is an explanation that squares with evidence readily observable during one's own travel. Although the explanation offered here is generalized and must by qualified for each specific case, I can enthusiastically recommend the book as a thoughtful overview of this important question.
"History made science"
Breathtaking sweep across time and geography, flying along on the coat-tails of a theory that is so intuitively acceptable that it almost makes you say 'duh'. A society's institutions, extractive (bad) or inclusive (good) explain the wealth of the society and the health and happiness of the common man (and, if you are really lucky, woman). I hated history at school because it didn't explain: just one damn thing after another. This does, right up to the end where they use their theory to predict the future success of current societies. It explains why 'state building' (e.g. in Afgahanistan) is such a challenge. The UK (a pioneer in modern state building) got properly started on the process in 1215, brought in universal education in about 1890 and gave women the vote in 1928. Mind expanding book.
"Brillianr explanation of the World we see today!"
Why Nations Fail is one of the most thought provoking books I've ever listened to.
This book explains in detail the reasons why we see the world as it is today. British, and in particular English creativity and entrepreneurism are at the heart of the story and describes how the actions of those people who wrestled power away from English elite society in the 17th century changed the face of the world for ever.
Well worth a read if you want to know why the USA succeeded to become the most powerful country in the world and didn't end up as just another failed state.
the authors repeat the same argument over and over, stretching vast amounts of historical examples to fit it's frame.
The reflexion is weak and unconvincing, thus the authors resort to an aggressive and patronizing rhetoric to dismiss other theories regarding the disparity between nations. They seem particularly threatened by Jared Diamonds Gun, Germ and Steal, and rightly so.
Although they would have us believe that we are responsible for our own misery or prosperity because of the institutions we live by, they then admit that there is no reason for one set of institutions to appear in one place rather than another, their explanation being a parallel between their theory and evolution, small institutional differences brought forward by crisis.
there is no proper causal description, at best a messy pile of historical examples correlated with economic development. Whatever argument worth mentioning could have been said in a few paragraphs
the fact that the authors are so pleased with themselves render the all experience rather unbearable.
"Repetitive, but interesting."
As has been said - repetitively - by other reviewers, this is a very repetitive book. And not just thematically. If you removed the words "inclusive", "extractive", "institutions", "glorious revolution of 1688" and ”creative destruction" the book would be about 9 hours shorter. It's still quite interesting (especially when they zoom in on specific histories, like with Botswana, Uzbekistan and Brazil, about which I knew nothing) and I kept going to the end, but the Grand Theory being espoused doesn't seem all that remarkable, unfortunately. (It can be summarised as: If your public institutions are strong enough to stop the gangsters from getting in charge, you're probably going to be okay, if not, you're screwed.) So, not bad, but not brilliant either. (Did I mention it's repetitive?")
"Not really what the title says"
It's an interesting look back at the history of how many of the world's richest nations came to be that way, but that's not really what the title says it's about. It doesn't highlight why nations fail, only how the successful ones got where they are.
No, too long, too boring, to badly read.
Not based on this.
There are books that you can’t put down and there are books you can’t wait to end. This was the latter for me.
The experience started badly in fairness. The opening chapters are a deluge of information and facts that come at you in an endless tirade with barely a pause for breath (literally in the audio version). Dan Woren reads the words legibly enough (if with some odd pronunciations to British ears), but so quickly and with so little emphasis on important points as to make it overwhelming.
After being bamboozled at the start, I found myself often having to skip back and re-listen to sections because I’d tuned out. I’m not sure if that was down to the laconic voice or the unengaging content.
Don’t let the title fool you either, this isn’t about why nations fail. It’s a history lesson in why some countries are rich and others poor in the modern world. It charts everything from the Glorious Revolution in England, to the exploitation of South America by the Spanish, to the rise of China.
Their argument is simple enough: inclusive institutions. By that, they mean political and social institutions where the people have a say, be that laws to insure the state can’t simple take what you have built, or democratically elected officials.
That’s not a reason why nations fail, its a reason why they don’t have long term stability, which generally seems to come along with prosperity, education and free discussion, looking at the examples stated.
I’m reading a similar book, Paul Collier’s The Bottom Billion, which delves into far more detail about the reasons nations fail to get out of poverty, and provides much greater insight.
Why Nations Fail is actually a history book, a look back at how various countries navigated their way into the top tier, or at least put themselves on the path towards it.
The book doesn’t attempt to provide answers, other than ‘because they don’t have inclusive institutions.’ It’s an interesting look back at the reasons certain things happened in particular countries, although each of those can only go so deep. It really only serves to highlight how little any of them shared.
If economic history interests you, then worth a look, but if you want to understand why nations fail, look elsewhere.
"Disappointing and painfully boring"
I usually do not write negative reviews but having listened to the whole book, I am surprised of the positive reviews. Perhaps it would have been different if I was to read the printed version, where I would have been able to skim read through some of the chapters. Most of all, I found this book extremely boring to listen to, very repetitive, and what I distaste the most is that the logic was flawed, and wrong. The author was drawing conclusion and assumptions, using historical events and facts, but jumping from one country to the other, and one age to another, with no particular connection, order or timeline. The action-consequence link is missing, and although I cannot vouch for all of the historical references, but some of them were either biased, or not completely the true account of events for that age. It is true that the author is merely presenting a theory, and perhaps there is some evidence to support that extractive vs inclusive institutional arrangements bear great influence on the progress or decline of nations. But it felt like he was picking a number of historical references, not necessarily linked, but just because they were convenient to use as examples. Examples do not make for a theory, it is the logic that holds a theory together! I am willing to accept some of his valid assumptions. However, because of the flaws in his logic and evidence, the bias of his Americanized point of view, and because he did not take into account a number of factors, apart from political and economic, such as socio-cultural, which are of as much importance, I could not make myself to side with his theory.
I intend to listen to this again. There is so much information that a second reading would be essential in a few months. However, this will be more of a duty than a pleasure because I often found the reading style irritating.
This is a unique book. I have read (or tried to read) other books on economic theory but none so readable and in my opinion, none so based in the real world.
Dan Woren did not do a good job. He got through the admittedly difficult concepts well enough but became gratingly irritating with the many non-English pronunciations. He started off reading Spanish words and names so authentically that I had trouble making out some of them, he then tried to pronounce African or Arabic names with a slight Spanish accent, obviously thinking that this would make it more authentic--it did not and it often resulted in the emphasis going on to the wrong parts of the words. When he got to the Chinese names, Woren gave up altogether and used the standard English approximations. The result was a ridiculous patchwork which reduced the effectiveness of what the authors had to say. The various subjects of this book's focus range all over the world and since Woren obviously does not have a comprehensive command (or even knowledge) of the huge variety of languages involved--and I cannot blame him for that--he should have stuck to a uniform English pronunciation throughout. I cannot say, though, whether this was Woren's fault or the director's. Certainly the director has to bear some of the responsibility for this mish-mash.
the mystery of poverty explained...
I'm glad I heard it.
"Great companion to Diamond's work"
This is a fantastic contrast to Jared Diamond's work on the origins of poverty. This should be required reading for anyone interested in the real sources of inequality. There is a slight danger in the book where anything that happens which is not consistent with the overall thesis becomes a 'contingency' of history. That said, the arguments are convincing and beautifully told.
"too long and repetitive"
I suppose it is repeating so that the listener gets the message.
they repeat the message so much that I got sick of hearing it.
but because it gives so many answers I give it 5 stars.
he held my attention.
stop trade protectionism.
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