Why Nations Fail is an interesting examination of the reasons why countries fail to build functioning democracies and economies. It’s ultimate argument is that it comes down to whether or not a state can build and maintain inclusive institutions – such as political representation and property rights.
It is a super interesting read, though it leaves me with some tiny reservations about some of the broad strokes of history that are employed throughout the book. However, without having such a huge contextual understanding of all countries everywhere, there’s nothing I can do with that feeling other than note it.
Also, I almost liked it more after reading the authors’ response to Bill Gates’ review of it. Oh man. So good.
What I did like about it was that it offered what seems like a more complex (and presumably less racist) interpretation of how nationals achieve economic growth. For example, in the first part of the book the geographical theory of development and show how it is inconsistent. Later on, it also discusses the problems with modernisation theory and also how bootstrapping economic growth via a dictator probably also won’t lead to democracy or economic growth.
However, they spend most of the book, as you can imagine, going through examples of how inclusive institutions work and why they lead to growth and how extractive institutions can’t achieve the same sustained growth. They detail why the industrial revolution happened in England, as a result of the glorious revolution and the beginnings of inclusive (though limited) institutions.
What was really fascinating thought was the operations of extractive institutions and how they were perpetuated over time. For example, how colonial institutions set up by the British or others weren’t dismantled after many countries gained independence, but rather they were kept and often intensified, leading to an extractive economy that benefited those at the top. The notable exception was Botswana, which already had the beginnings of its own inclusive institutions, which they managed to preserve during colonial rule and after. I really want to read a political history of Botswana now!
My only worry is that inclusive institutions aren’t inevitable and need to be vigorously defended. In this day in age, it sometimes feels like they are all under attack, so long live rule of law, freedom of speech, freedom of the press and all those good things.
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