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Why Nations Fail: The Origins of Power, Prosperity, and Poverty

Daron Acemoglu, James A. Robinson · 9 HN comments
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Brilliant and engagingly written, Why Nations Fail answers the question that has stumped the experts for centuries: Why are some nations rich and others poor, divided by wealth and poverty, health and sickness, food and famine? Is it culture, the weather, geography? Perhaps ignorance of what the right policies are? Simply, no. None of these factors is either definitive or destiny. Otherwise, how to explain why Botswana has become one of the fastest growing countries in the world, while other African nations, such as Zimbabwe, the Congo, and Sierra Leone, are mired in poverty and violence? Daron Acemoglu and James Robinson conclusively show that it is man-made political and economic institutions that underlie economic success (or lack of it). Korea, to take just one of their fascinating examples, is a remarkably homogeneous nation, yet the people of North Korea are among the poorest on earth while their brothers and sisters in South Korea are among the richest. The south forged a society that created incentives, rewarded innovation, and allowed everyone to participate in economic opportunities. The economic success thus spurred was sustained because the government became accountable and responsive to citizens and the great mass of people. Sadly, the people of the north have endured decades of famine, political repression, and very different economic institutions—with no end in sight. The differences between the Koreas is due to the politics that created these completely different institutional trajectories. Based on fifteen years of original research Acemoglu and Robinson marshall extraordinary historical evidence from the Roman Empire, the Mayan city-states, medieval Venice, the Soviet Union, Latin America, England, Europe, the United States, and Africa to build a new theory of political economy with great relevance for the big questions of today, including: - China has built an authoritarian growth machine. Will it continue to grow at such high speed and overwhelm the West? - Are America’s best days behind it? Are we moving from a virtuous circle in which efforts by elites to aggrandize power are resisted to a vicious one that enriches and empowers a small minority? - What is the most effective way to help move billions of people from the rut of poverty to prosperity? More philanthropy from the wealthy nations of the West? Or learning the hard-won lessons of Acemoglu and Robinson’s breakthrough ideas on the interplay between inclusive political and economic institutions? Why Nations Fail will change the way you look at—and understand—the world.
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The factor people tend to be blind to (I was) is the magnitude of the effect of historical institutions to current state of affairs. American perhaps are more blind to this than others as their institutions start at a point when the relevant research material concerns things which at that point (18th century) were already centuries old.

Old institutions affect the prosperity and quality of current institutions surprisingly much:

Hapsburg empire:

https://voxeu.org/article/habsburg-empire-and-long-half-life...

An old inca highway:

https://www.economist.com/graphic-detail/2021/07/31/an-inca-...

LOTS of old borders which obviously demarcate centuries old polities, treaties and circles of influence (you need to know what they are to observe them in this map) - mapped nicely into how strongly higher education is inherited:

https://journals.sagepub.com/doi/10.1177/23780231211019890

As an example we can take Finland that has an obvious area more dark in the east than rest of the country. The funny thing is this area delineates a territory that fell under the Novgorod sphere of influence in 14th century in the treaty of Nöteborg https://en.wikipedia.org/wiki/Treaty_of_N%C3%B6teborg

Daron Acemoglu has a fantastic book discussing the tenacity of historical institutions make or brake current affairs centuries after: Acemoglu: Why Nations Fail (e.g. https://www.amazon.com/Why-Nations-Fail-Origins-Prosperity/d... and so on)

distances
> Hapsburg empire:

This was extremely interesting, and at the same time quite depressing that present-day corruption levels depend on last centuries instead of just the strength of current institutions.

fsloth
I'm not sure if it's depressing - generally institutions that attempt rapid reprogramming of population are not considered humane. As mantra goes - culture trumps process. Culture of society even more so than in companies.
I recommend reading “Why Nations Fail” by Daron Acemoglu. At a very high level, nations often fail because of elite-driven rent extraction. Sometimes they don’t just fail for a few decades, they continue to spectacularly fail for centuries.

When people are forced out of their social and economic agency by a narrow elite, they will continue to be deprived of their agency long after that elite is replaced by another elite and another elite until people forget that they ever had culture and wealth. Now, I don’t think we’re seeing the worst manifestation of that in the U.S. Far from it. But it was striking to see not only how consistently problematic elite stratification is, but how good it can be to give power to the people.

Why Nations Fail: The Origins of Power, Prosperity, and Poverty https://www.amazon.com/dp/0307719227/ref=cm_sw_r_cp_api_i_pp...

Nice but too simplistic. The best work I have come across on the topic is: Why Nations Fail: The Origins of Power, Prosperity and Poverty

https://www.amazon.com/Why-Nations-Fail-Origins-Prosperity/d...

Absolutely fantastic book:- Why Nations Fail: The Origins of Power, Prosperity, and Poverty

https://www.amazon.com/Why-Nations-Fail-Origins-Prosperity/d...

Jan 15, 2017 · neom on Is Europe Disintegrating?
I feel very weird that most of my recent comments have been book recommendations, never the less, as usual peripherally related. And yes, i know Europe is not a nation. Hence peripherally. :) https://www.amazon.com/Why-Nations-Fail-Origins-Prosperity/d...
After the second world war, Soviet Union was growing so fast that many smart people in western world that communism is superior to capitalism.

However, Soviet Union economic growth peaked in 1959. It was primarily based on catch up growth: recovery from WW 2 and moving ppl from agriculture to industry.

Is China similar story? http://blogs.ft.com/beyond-brics/2015/12/09/like-soviet-russ...

A good read on that: https://www.amazon.com/Why-Nations-Fail-Origins-Prosperity/d...

I give 50/50 chance to China will avoid this fate, but not more.

noir-york
Russia had a ceiling: Russian population was less than that of Europe or the US. Chinese population is larger than both combined.

Russia was wedded to an ideology; the Chinese are pragmatist and practicing corporate capitalism. China will not only avoid the same fate, they will almost certainly come to dominate by sheer force of numbers.

China is practicing the economics equivalance of embrace (buy Western technology), extend (their own 3G standards for instance), and eventually extinguish (locking the West out of their market)

varjag
Soviet Union had larger population than the USA in 1959. Russians comprised slightly over a half of the overall Soviet population.

That's before you add any Warsaw Pact countries..

As others have noted, the issue is that so many political terms are relative (e.g., the way 'terrorist' is applied to Middle-Easterners far more swiftly and casually than Americans who are equally violent for very similar reasons.)

An organization doing what Google and Facebook are doing must therefore (a) clearly articulate the position on which their judgments are based (b) openly assert that their position is fundamentally superior and preferable to the moral order that accepts the practices that are being suppressed (c) provide a open and defensible argument for selecting one set of values while forcefully rejecting another and (d) be willing to modify this position in the event that fatal contradictions appear, or excessively negative consequences result.

In short, these platforms must not just govern, but do so from a well-considered and articulated philosophy of liberal governance.

Fortunately, they need not start from scratch. There is an abundance of data to support the idea that nations that have broadly inclusive economies with widely and equitably representative policy making bodies are the most prosperous, stable, and desirable places to live. (For details, see "Why Nations Fail" by Daron Acemoglu and James Robinson https://www.amazon.com/Why-Nations-Fail-Origins-Prosperity/d...)

By adopting for themselves the governing principles that underpin the most successful societies, Internet platforms can become greater forces for good. At the same time this empirically grounded approach will better shield them from maliciously self-serving people who want to see political and economic power concentrated in the kinds of small and closed sets of hands (specifically, theirs).

As any number of examples from Egypt to Russia to Venezuela to Zimbabwe have shown, those who dominate closed economies and the political systems that reinforce each other invariably make life a living hell for everyone. To the extent that these systems are maintained by way of retrograde social norms, any platform committed to a more open, just society should have no qualms about disarming those who view civil society as anathema.

Apr 09, 2016 · elcapitan on School Is to Submit
> The examples of China, Japan and the USA suggest the exact opposite.

I think the comeback of Japan after WW2 speaks against this. Also the US are probably a good example of copying the existing British institutions (with the exception of the crown, although you might argue that the US president is king-like).

More broadly speaking, it's probably not so much about "submitting to a rich nation", which is a pretty crazy simplification that doesn't apply to many former colonies. But I think you can find a strong correlation between former parts of the British Empire and now Commonwealth or Ex-Commonwealth and the successful implementation of institutions that give them wealth and freedom. Read "Why Nations Fail" [1] to get some examples of that, one that I remember was https://en.wikipedia.org/wiki/Botswana.

[1] http://www.amazon.com/Why-Nations-Fail-Origins-Prosperity/dp...

yk
I thought about Japan before WWII, the causality is backwards for the claim in the post. Why Nations Fail is actually somewhere on my to read stack, hopefully I find some time to actually read it.
elcapitan
It's a good book, although I'm not so sure if they fact-checked the historical details, at least for some chapters. Some of the stuff concerning Germany looked a bit questionable, but it doesn't harm the overall quality of the argument.
"These circumstances have been happening since the creation of the United States."

No dude. Just...no.

Gerrymandering has existed for ages but only in recent years - with the advent of seriously high-powered data mining - has it had anything remotely close to the influence it now possesses. Citizens United (which did a major number on campaign finance) passed in 2010. Key sections of the Voting Rights Act were overturned last June, less than a year ago. As far as powerfully damaging structural changes go, these are all very recent events. Your position is like saying "computers have always existed" while ignoring the differences between an abacus and a Xenon chip.

And saying "seats turnover in the House ever year" is even more meaningless. Intelligent people look at the rate of turnover - which is at record lows and declining relentlessly and not because people are satisfied. Indeed, approval ratings for Congress are setting record lows as well. The reason these trends don't correct each other is because Congress has - in recent years - secured an unprecedented level of detachment from the will of the public. This, in turn has become a major factor in driving inequality to unprecedented levels.

On the off-chance that you're genuinely interested in the relations between regulatory capture, extreme concentrations of wealth, and the proliferation of rentier economies, I can strongly recommend "Why Nations Fail" by MIT's Daron Acemoglu. One of the essential point he makes is that Inclusive economies (i.e., the good kind) can often give way to Extractive economies (the bad kind) following periods of retrograde policy change not unlike the ones we're presently witnessing.

http://www.amazon.com/Why-Nations-Fail-Origins-Prosperity/dp...

dustin1114
In regards to "circumstances", I was specifically referring to the gridlock in Congress (since we're posting links, here's one: http://blog.oup.com/2013/10/federalist-papers-government-gri...), not gerrymandering; which is prevalent in heavily GOP and heavily Dem states. I think gerrymandering is a little off-topic here, so I'll defer for now :-)

The truth is, I think we might agree more than you think. The problem with the last thirty or so years in politics is that politicians (and by default, those they appoint) and special interest groups (corporations, labor unions, etc.) have created together what's we often referred to as "crony capitalism." Do you really think that the FCC and the current administration are doing this "for the people?" No, they're pandering to the tech block (Google, Facebook, eBay, etc.). I don't see that is being too much different than pandering to the big ISP's.

Capitalism without a sense of morality will itself turn into an oligarchy, as we see now. Thus, people seek more government regulation, which then just breeds more interference in individual freedoms.

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