Why Nations Fail PDF

Why Nations Fail PDF Summary

Dear readers, here we are offering Why Nations Fail PDF to all of you. Why Nations Fail is a popular book which was originally published on 20 March 2012. The complete name of this book is Why Nations Fail: The Origins of Power, Prosperity, and Poverty. Why Nations Fail has received 4.5/5 stars rating on Amazon, 4.1/5 stars ratings Goodreads, and 4.6/5 stars ratings on Flipkart.

It is also liked by 93% of Google users. Why Nations Fail is written by Daron Acemoglu, and James A. Robinson. This book is about the huge differences in incomes and standards of living that separate the rich countries of the world, such as the United States, Great Britain, and Germany, from the poor, such as those in sub-Saharan Africa, Central America, and South Asia.

As we write this preface, North Africa and the Middle East have been shaken by the “Arab Spring” started by the so-called Jasmine Revolution, which was initially ignited by public outrage over the self-immolation of a street vendor, Mohamed Bouazizi, on December 17, 2010.

Why Nations Fail PDF – Summary

Developed countries are wealthy because of ‘inclusive economic institutions’ – Basically a combination of the state and the free market in which:

1. The state creates incentives for people to invest and innovate through guaranteeing private property rights and enforcing contract law.
2. The state enables investment and growth through providing education and infrastructure..
3. The state is controlled by its citizens, rather than monopolised by a small elite. Crucially, there needs to be a democratic principle at work in which people in politics establish institutions and laws which work for the majority of people, rather than just working to benefit the rich.
4. The state also needs to maintain a monopoly on violence.

In contrast to those countries which develop ‘inclusive economic institutions’ which encourage development, the authors suggest the opposite ‘extractive economic institutions’ (think corrupt dictator and his clique stashing money into a Swiss bank account) can generate growth in the short-term, but in the long term result in poverty.

They also suggest that there has been ‘a vicious circle’ at work in many underdeveloped countries over the last three to four centuries: Extractive institutions were first established by a colonial power (typically built on already existing internal extractive institutions), which, on independence, became even more extractive under postcolonial rulers, which in turn lead to civil war as competing factions fought for control over the extractive institutions – which then led to a decent into chaos and failed states.

The authors see little hope for such countries. In contrast, developing countries such as the US and the UK have benefited from three to four centuries of a virtuous circle in which institutions have become gradually more inclusive, which has created increasing incentives for entrepreneurs and economic growth.

The authors come to this conclusion through a number of comparative studies of countries which are in close geographical proximity to each other such as

• Mexico/ America
• South/ North Korea
• Botswana/ Zimbabwe

They argue that the crucial difference between these pairs of countries is the institutional infrastructures which have been established through the last few decades/ centuries, and it is this that explains their relative development/ underdevelopment.

Why Nations Fail PDF – About the Authors

2nd Author of the book Why Nations Fail

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