Over the past two or three years this book has been recommended to me by my peers a number of times. ‘The book of the decade’, they beam at me, ‘You should read it’.
Even though I’m interested in politics, I was hesitant to pick up a book written by two economists. I’m a designer for Pete's sake, what do I know about economics? Numbers scare me!
No offense to any designer who also has comprehensive knowledge on the subject though. :P

Turned out the book wasn’t hard to read at all. Being interested in politics didn’t make me a pundit in the subject. In fact, I had no prior academic knowledge on how the wheels of a state spins collectively or what ticks its economy.
Still, the book made clear sense to me. It appears that the writers formatted and worded the book in layman's terms, so people who are not au fait with related topics can also understand. Jargons are there but explained with real life examples.

So What is it about?

Daron Acemoglu and James Robinson explain why some nations are poorer than others and what makes their counterpart nations rich and how they sustain that wealth.

They presented some existing ideas on what makes a country poor and refuted them.

1. ‘The Geography Hypothesis’ says that two nations might have different economies based on their geographical locations.
   The authors refuted this theory with examples of multiple adjacent border locations like North and South Korea, US and Mexican border cities that are situated in the same region but their economy differs from one another by a considerable margin.

2. ‘The Culture Hypothesis’ says, some cultures have better work ethics and thus they’re more advanced. They refuted this too with examples of cultures that are widely varied and are advanced. Culture hypothesis cannot explain their economy.

3. ‘The Ignorance Hypothesis’ asserts that the rulers of those poor nations do not know how to prosper. Also from real world examples, cases where the rulers knew exactly what they needed to do to make their countries better but did not choose it so—the authors refuted this one as well.

After that, they presented their own theory. And then in the entire book, citing countless charts of statistics, empirical evidence, history-they showed that their theory checks out.
Seriously, the amount of citations can overwhelm anyone!

What makes a nation poor (or vice versa)

According to them, a nation fails and becomes poor when they have extractive political and economic institutions—where a small number of elites or a body of oligarchy controls the entire state and the common people cannot take part in its political system and as a result cannot make change upon it.
A nation gets prosperous and better when it has inclusive political and economic institutions—where political power isn’t centralized, is accountable and the people can take part in politics and economy.

These two scenarios are accompanied by respectively— a decentralized state system where the central administration cannot control all of the state and a centralized state system where the state has authority over all of it.

So, to prosper, a nation has to have its political power decentralized so the power players can keep each other in check along with a centralized state system that can hold anyone accountable for their actions.

They showed—(with enough evidence of course, gosh, am I repeating myself too much?)—the nations which see some development under an extractive system, fall eventually and it is not sustainable. The most obvious example to that is - Russia.

Also the growth under an extractive system is relatively small. To demonstrate this, the authors went back to the hunter-gatherer era. From there— the ancient rome, via colonial period to the modern world small tribes, countries and their economic history. They explained how two adjacent places where only a theoretical border makes the difference—go onto their separate economical paths.

Some personal notes

I couldn’t help relating to many nations and places in these chapters. My part of the world was colonized by the British and I’ve read all about that history. The occupiers will siphon all the resources of a native land—I understand that to be a de facto truth .
However, while the British did that to the colonies they occupied, they themselves had an inclusive system growing and thriving in their own country. If I surmised correctly, Britain wouldn’t be able to sustain itself if it wasn’t politically and economically inclusive then.

When it comes to looting—foreign lands only baby!

And no, they weren’t the worst! This book does give a comprehensive account of many colonial empires and their illustrious conquering frenzy (to explain how economy in each part of the world succeeded) and I’m glad that we had the British ones rolling us flat, not the Spanish ones!
The history of Africa and African nations comes up frequently in their examples. I guess this won’t surprise anyone.

The authors showed how these colonial giants emerged, how they looted and how inclusive political and economic systems in their own land started to form gradually. Not everywhere those inclusive systems prevailed, no. In ancient Rome an existing inclusive system later turned into an extractive one and that goes to show achieving an inclusive state isn’t an one time deal. Like freedom, it has to be protected and nurtured.

Do I buy any of this?

The entire book is filled with statistics and so many historical notions that support their theory that I’m actually convinced!
However it should be noted that they admitted that they wanted to unify everything under one theory but it is not definitive or the last say regarding this topic. Their theory is not a historical fact nor it is undeniable. Take it or leave it.

Oh, on another note, this book gave me some explanations on why dictators do not want their countries to grow economically and make sure it doesn’t happen—but I wanted to know more about it. Also exactly how they achieve such a feat and persevere. So I went ahead and read another book titled **'The dictator's handbook' by Bruce Bueono de Masquita and Alaistair smith. This duo are political scientists.
I will write about my thoughts on that book someday. Even though it is mostly about politics, a large portion of it deals with economics as well.
I also ended up reading Jared Diamond’s ‘Guns, Germs and Steel’*, a Pulitzer winning book on sociology and how many civilizations emerged. It was very thorough.

Looks like I’ve got sidetracked. I should stop.

Anyway, I come from and live in a third world country infested with corruption, rigged elections, government sanctioned money laundering, political assassinations and extra judicial killings—yet I dreamed of a better tomorrow. A future for me and my family. Reading “Why Nations Fail” was a wake up call for me. A blow to the head, a pouring of ice cold water on my drowse.

I didn’t do a good job summarizing the entire book (it is quite vast!) and I would advise not to judge the book based on my understanding of it. If you’re interested in the subject, however—I strongly recommend reading it. Seriously, pick it up. It’s a perspective changer.

cover photo source

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