Why nations fail is a great book and a great read but reviewers like David Levine were quite good in pointing out its many flaws.
Greeted with wide acclaim, Why Nations Fail: The Origins of Power, Prosperity, and Poverty, should put to bed all debate on using foreign aid to promote economic development on a national level.
Authors Daron Acemoglu and James A. Robinson effectively deploy path dependency to explain the trajectories of the political institutions that form the core of their argument: Nations with “inclusive” political institutions succeed economically whereas those saddled with extractive” political institutions fail. Citing cases from myriad times and places, the authors demonstrate the relationship between political institutions and economic development. The authors tether their argument to Schumpeter’s idea of creative destruction in the marketplace: No creative destruction, no long-term development. Nations encumbered by extractive political institutions typically privilege monopoly. And so, over time, their economies atrophy.
So far, so good. In deploying path dependency to explain why institutions, once in place, tend to persist, authors add a solid…
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