Summary of Why Nations Fail

underdevelopment is caused by political institutions and not by geography, climate, or other cultural factors. Elites in underdeveloped countries deliberately plunder their people and keep them impoverished.

Political institutions are often shaped by historical contingencies.

Political institutions are often shaped by historical contingencies.

hus, as England moved towards greater freedom, Eastern Europe moved towards an ever more extractive economy based on the coerced labor of serfs.

As the status quo is disrupted, new populations will gain access to different economic opportunities and will be able to challenge elite power hierarchies.

tighten their grip on resources

paved the way for

greater guarantees of property rights and receive more of the fruits of their own labor.

The change in the laws encouraged innovation and industry

authors ignore the extent to which global capitalism creates and depends upon inequality.

possibility that economic success in one democratic nation may be linked to the undemocratic exploitation of another is never examined.

Sustainable development is linked to virtue, which means that to the extent nations are successful, they are presented as virtuous

There are academic debates about whether geography, culture, or political institutions cause differences in development. Acemoglu and Robinson argue strongly for the importance of the last of these.

But since countries are underdeveloped because of extractive political institutions, these institutions will ignore or sideline new mechanisms of accountability that threaten their power or reduce their ability to plunder. Similarly, extractive governments will simply expropriate foreign aid for elites.

China’s economic growth did, in fact, appear to be weakening. The growth rate in 2015 was 6.9 percent, the lowest in China in 25 years

Authoritarian extractive governments can sometimes encourage growth by moving resources into more productive sectors of the economy. The Soviet Union achieved impressive growth through centralized industrialization which encouraged the growth of industry and the military in the decades before 1970. However, an extractive government ultimately stifles innovation and siphons resources away from productive activities.

violence and conflict are among the major causes of poverty worldwide. The 2011 World Development Report argued that violence traps many countries in inescapable cycles of poverty.

When pluralist institutions are established, they tend to perpetuate and reinforce themselves in a virtuous cycle. This is what happened in Britain after the Glorious Revolution. The establishment of pluralist institutions created a system wherein people could petition the government for more reforms. Since the government depended on assent from many people rather than from a small group of oligarchs, it became easier to slowly reform the government than to institute repressive measures. As a result, Britain moved slowly towards a true representative democracy over the course of several centuries.

Contrary to the Whig interpretation, freedom and democracy aren’t the inevitable result of progress. Rather, they’re the result of luck and happenstance. Democratic gains might never have happened, and, in the worst case, could be reversed if the wind shifts.

Whig interpretation of history understands the world as moving from less freedom and virtue towards more freedom and virtue culminating in the great freedom and virtue of the present. History becomes a chronicle of inevitable progress, which will, presumably, continue into the future.