History & society

Why Nations Fail

Daron Acemoglu and James A. Robinson

The Origins of Power, Prosperity, and Poverty

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  • 12 key ideas
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  • Published 2012

Introduction

Why are some countries rich and others poor? Daron Acemoglu, an economist, and James A. Robinson, a political scientist, argue that the answer is not geography, not culture, and not leaders who do not know better, but institutions: the economic and political rules a society lives by. Where institutions are inclusive, most people can own property, start a business and have a say in how they are governed, and new ideas can replace old ones. Where they are extractive, a narrow elite runs the economy to take wealth from everyone else. Politics, the authors argue, decides which kind a country gets, and both kinds tend to reproduce themselves.

The book has fifteen chapters. The preface starts from the 2011 protests in Egypt's Tahrir Square. Chapters 1 to 4 set out the problem, reject other explanations and lay out the authors' theory. Chapters 5 to 8 follow history from the first farming societies to the Industrial Revolution, asking why it began in England and why rulers elsewhere resisted it. Chapters 9 to 12 show how colonialism spread extractive institutions, how prosperity reached some places by other paths, and why good and bad institutions both last. Chapters 13 to 15 turn to why nations fail today, how a few broke the mold, and what this means for efforts against poverty, including foreign aid.

Note: this book was written in 2011 and published in 2012. Later events, such as the Taliban's return to power in Afghanistan in 2021, are not in it. The judgements in this summary about countries, governments and leaders are the authors'; the summary reports them and adds none of its own.

  1. 1Acemoglu and Robinson argue that rich and poor countries differ because of their institutions, as the two halves of one border town show
  2. 2The authors argue that geography, culture and the ignorance of leaders cannot explain why some nations are rich and others poor
  3. 3Acemoglu and Robinson argue that inclusive institutions, which let most people use their talents and keep what they earn, make countries rich, while extractive ones, which take from the many for the few, keep them poor
  4. 4The authors argue that rulers often block new technology because growth brings creative destruction, which threatens their wealth and their power
  5. 5Acemoglu and Robinson argue that small differences between societies matter most at critical junctures, such as the Black Death, when a shock can push them down very different paths
  6. 6The authors argue that extractive institutions can produce growth for a while, but not lasting growth, because they leave no room for new ideas
  7. 7Acemoglu and Robinson argue that England's revolution of 1688 put power in the hands of a broad coalition, and that this is why the Industrial Revolution began there
  8. 8The authors argue that European colonialism often made places poor by building extractive institutions there
  9. 9Acemoglu and Robinson argue that inclusive and extractive institutions both tend to reproduce themselves, through virtuous and vicious circles
  10. 10The authors argue that nations fail today for one reason: a narrow elite runs the economy for its own benefit, whatever form its rule takes
  11. 11Acemoglu and Robinson argue that history is not destiny: Botswana, the American South and China broke the mold at critical junctures
  12. 12The authors argue that prosperity cannot be engineered from outside: aid, expert advice and authoritarian growth fail without broad political change

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Why Nations Fail: summary | Daridanesh