This tale sounds good, but it is simplistic. Although domestic politics can encourage or impede economic growth, so can many other factors, such as geopolitics, technological discoveries, and natural resources, to name a few. In their single-minded quest to prove that political institutions are the prime driver or inhibitor of growth, Acemoglu and Robinson systematically ignore these other causes.
Second, we never said that geography is irrelevant — how would one otherwise explain why there aren’t holiday resorts in Antarctica? We argued and demonstrated that the geography hypothesis, which links the huge cross-country differences in prosperity to geography is wrong and unhelpful…
Politics can be important for some kinds of comparisons (particularly between next-door neighbors, where geography is similar and therefore can be “held constant” in the comparison), but might also explain little of the differences between countries situated in very divergent geographical conditions.
Why ‘Why Nations Fail’ Fails (Mostly) by Duncan Green
Notes from Bill Gates
(And of course) What Bill Gates Got Wrong About Why Nations Fail by Daron Acemoglu & James Robinson
1. Was the message convincing – why or why not?
2. How will knowledge of inclusive and extractive political institutions be of practical use for you in the international development field?
3. What are other works worth reading related to this book? (Jared Diamond’s Guns, Germs, and Steel comes to mind)
4. What are the strengths and weakness of the methodology (and emphasis on history)?
Here’s what USAID thinks you should think about while you read Why Nations Fail:
5. How do institutions create the incentives that lead to sustained development and poverty reduction?
6. Do you think that institutions explain all of the differences in development across countries, or are some of these differences due to geography, culture, ideas or even just luck (good or bad)?
7. The book argues that China has so far developed with extractive rather than inclusive institutions, and therefore China’s rapid growth cannot continue and may even collapse. Do you agree?
8. What are the implications of the arguments in this book for USAID and how we direct our assistance?
See if it’s at a library near you
This April we are reading Why Nations Fail, a well known book by Daron Acemoglu and James Robinson. The authors incorporate more history than any global development book so far. In just the first few chapters they use history to explain how different colonization tactics informed the current political systems in the USA and Mexico. They also explain the shortcomings of economics and the need to study political institutions.
The book dispels different myths surrounding why nations fail. For example, popular reasoning argues that geography and culture are some of the reasons for wealth disparities between states but Acemoglu and Robinson combat these misconceptions right away.
I sat down to read the preface and was still reading 2 hours later. This is a captivating book with a lot of information.
We will argue that to understand world inequity we have to understand why some societies are organized in very inefficient and socially undesirable ways. -Why Nations Fail