Summary and Critique of Why Nations Fail: The Origins of Power, Prosperity, and Poverty
The book Why Nations Fail: the Origins of Power, Prosperity, and Poverty by Daron Acemoglu and James A. Robinson try to convey the incentives motivating individuals and the regulations influencing a nation’s economy and its possible outcomes. The result is an extremely valuable work providing loads of information based on chronology and geography and consists of highly appealing historical accounts involving the political and economic environment.
Drifting apart: chapter summary
This is one of the important chapters which traces the type of institutional drift, the evolution and significant junctures either away or towards inclusive institutions. The chapter tries to inform that most societies have extractive institutions. Inclusive institutions may be easily reversed as they are extremely vulnerable. Also significant junctures and fewer discrepancies in institutions are transient. This chapter traces the history of Venice followed by Rome and Western Europe with emphasis on Ethiopia.
Chapter 6 of this book is titled Drifting Apart emphasizes on the development of diverse institutions in various parts of the globe and provides an explanation of the diverse manner in which they evolved over time. The first subtopic starts with the history of Venice. The book gives a detailed account of the political and economic conditions under which Venice thrived and the manner in which these institutions changed over a period of time. It is an extremely valuable historical account of the nation with details of politics and economic impacting the manner in which the lifestyle of the individuals modified. The chapter tells us the manner in which inclusive institutions in Venice like ‘commenda’ was banned and the nation stepped towards extractive economic and political institutions. The outcome of Venice by adopting extractive institutions have been put forth by the authors before going on to discuss the significant role played by differences in institutions in the prosperity of a nation.
The next sub topic was dedicated to the Roman Empire and the manner in which extractive institutions along with consistent vices like slavery created increased income inequalities. The wars and the vandalism in the Roman Empire had taken its toll in the country. The constant struggle by the rich senators led to the formation of extractive economic and political institutions thereby leading to the decline of the Roman Empire. However a lot has been written about the economic conditions and the measures taken by the state to ensure financial and monetary stability during this time.
The next subtopic deals with the historical development of certain institutions in Europe and the manner in which the lifestyle of people changed. The mention of vices like feudalism and slavery have been well accounted in this chapter.
The chapter tries to show the reversal of inclusive institutions as is the case with Venice. The next significant learning is that small discrepancies in institutions may be critically significant by their transient nature. This point is well illustrated by putting forth the example of England which was a backwater during that period. The chapter also discusses about the significant institutional development in Western Europe by citing historical developments in Ethiopia.
Chapter Summary: The Diffusion of Prosperity
This chapter again deals with inclusive institutions by narrating the diverse circumstances under which Australia developed an inclusive institution. The chapter narrates the manner in which British convicts were deported to this nation and the circumstances that forced the guards to provide incentives to convicts and thereby encourage the formation and development of inclusive institution. This chapter maintains that the formation of an inclusive institution in Australia was for completely different reasons as was the case with Great Britain and the United States of America.
The next subsection deals with the manner in which inclusive institution came to be formed in France which led to one of the most significant reforms - the abolition of feudalism and recognizing that all citizens are equals. This paved the way for income equality rather than income disparity. The chronological events that led to an inclusive institution in France has been thoroughly traced and detailed in this chapter. Especially the circumstances leading to the French Revolution and the cause for subsequent failure to defeat France by several European countries have been accounted in this subtopic. The French army captured many parts of Europe including Belgium, large parts of Switzerland, Netherlands, Italy and Western Germany. However, the captured nations witnessed radical change by the abolition of feudalism and imposition of equality. This trend was continued by Napoleon. However, the reforms posed by Napoleon and the French were reversed in some locations like Hanover in Germany.
The next subtopic deals with the institutions in Japan. The contribution of the Meiji Dynasty in abolishing feudalism and bringing transformative reforms in institutions has been chronologically traced. The year 1869 witnessed equality as a right given to all citizens. Infrastructural development including the construction of steamship line, factories and other economic institutions have been described in order to show the manner in which Japan moved towards inclusive institution.
The chapter maintained that although Japan and China had absolutist regime, China moved towards extractive institutions whereas Japan developed inclusive institutions. Several circumstances have been described for these different institutions in these nations.
The next subtopic maintained that institutions impacted the manner in which nations took advantage of critical opportunities and those which failed. The chapter concludes by maintaining that inclusive institutions have supported the exchange of notions, wealth, technology and activities and are hence successful than nations that have adapted extractive institutions. The authors view the manner in which the industrial revolution became the initial divergence in the progress of the globe and the level by which inclusive and extractive institutions incentivised industrialization in diverse areas of the globe.
Critique of chapters 6 and 10
The need to restore order for nations to prospect is significant. However, take the case of China. It has an autocratic rule thereby leading to established order across the country. This deems that the authors stance on inclusive institution in the case of China to be extremely controversial. The stance taken by the authors that inclusive institution without order may help in curbing penury but will not help in establishing modernity falls short in case of China. Accordingly the thesis that the political struggle against the elite class leads to prosperity does not hold good for this nation.
Conclusion
Overall, the book provides detailed chronological historical developments leading to the formation of inclusive and extractive institutions and the manner in which the emergence of such institutions have impacted nations over a period of time. However, the recurrent significance of luck and chance has been portrayed as an important factor in these chapters. However, despite its misses the book is has been a work of extreme research and has done a lot to stimulate debate.
Works cited:
Acemoglu, D. & Robinson, J.A. Why Nations Fail: The Origins of Power, Prosperity, and Poverty. New York: Crown Publisher, 2013. Print.
