"Why Nations Fail? The Origins of Power, Prosperity and Poverty" by D.Acemogulu and J.Robinson, first published in 2012 is a popular book that seeks to answer the question as to why some nations prosper, and others are condemned to poverty. In effect, the book is planned in a way that the French Historian F.Braudel would be proud of - seeking to analyze things on a large scale landscape, with detailed examples form World Economic History. As against prevailing theories, Acemogulu and Robinson proposed the centrality of the institutions of a nation, and their interactions with so called critical junctures that go on to determine whether a nation would be poor or prosperous in the long run.
The book's premise is simple - Over a period of time, if extractive economic and political institutions are formed in a nation state with a small elite enriching itself at the expense of the people creating inequalities of wealth, this would create a vicious cycle during critical junctures of history, trapping the people in poverty. But, whereas, the formation of Inclusive economic and political institutions, based on protection of poverty rights, individual freedom, centralization of authority, enlarges the fact that the ruling elite would have no appetite or incentive to fight for status quo in the face of progressive opposition, paving the way for a virtuous circle to take place, creating Prosperity. Thus, for instance, the impact of Spanish Conquistadors and their extractive institutions continued their vicious hold in countries of Latin America, whereas the kind of Colonialism that existed in Canada, Australia etc, fostered inclusive institutions, creating prosperity. The tribal nature and colonial exploitation in African countries like Sierra Leone, Zimbabwe played on a larger scale fostering a vicious cycle. There are exceptions where countries broke the mold of vicious cycle, as an exception to the 'Iron grip of Oligarchy' during critical junctures, viz, Southern USA in 1960s, Botswana in 1980s, People's Republic of China in 2000s.
Despite the sweeping generalization and the rich examples offered in the book, there is a perception that it fails to adequately address the perils of Colonialism and Imperialism. In putting too much emphasis on institutions of a nation, it fails to account for the current rise of China. The role of geography is also a decisive factor. Yet, the book remains an impressive one, and offers deep insights into man's quest for finding meaning and definiteness in prosperity and poverty of nations.
Maheeth Veluvali (Sonu)
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