Why Nations Fail: The Origins Of Power, Prosperity, and Poverty, by Daron Acemoglu and James A. Robinson

This is a book that I must admit at the outset is highly appealing to me for a variety of reasons. Before I review the book, I thought it worthwhile to explain why it is that the book appealed to me, to account for any sort of bias that I would have in its favor. For one, the book speaks from a resolutely anti-imperial fashion that is also free of any sort of racial or physical determinism. The book fully respects the contingent aspects of history and manages to find a middle ground between the anarchy and chaos that threaten so many failed states as well as the often attractive authoritarianism that can also be found, showing that prosperity depends on the existence of a centralized but pluralist state with a wide degree of freedom of opportunity and security of property for common folk. By defending the freedoms and legitimacy of creative and inquisitive folks like myself, there is much for me to find appealing here as a historian and as writer.

The book itself consists of fifteen chapters that span about 460 pages of solid text. A survey of the chapters reveals the wide breadth and nuance of the span of human history and prosperity, starting at an examination of the two halves of Nogales and their striking differences, then looking at failed theories that appeal to the ignorance of leaders or to geographic or cultural determinism. Then the book looks at the origins of prosperity and poverty in institutional and political matters, before paying attention to the small differences and critical points at which the past is shaped and shapes the present. The sort of limited and temporary growth that occurs under extractive institutions, institutional drift, and the turning point of the Glorious Revolution take up the next three chapters. After this the authors discuss the barriers to development that selfish elites often place to protect their own domination, as well as looking at how imperialism and colonialism impoverished large parts of the world. After this the author discusses the alternative paths to prosperity other than that of England that led to the same place with pluralistic and egalitarian societies that were free and prosperous. The book then looks at the virtuous and vicious cycles that tend to push nations towards increased success or further failure. After this the book looks at the institutions that lead to societal failure, a few nations (like Botswana and Brazil) that appear to have broken the mold in order to achieve greater and more sustainable success, before looking at why most attempts to combat poverty have failed by failing to tackle institutional matters within failed states.

By looking at examples as varied as Venice and South Korea, the book manages to demonstrate the very contingent aspects that are necessary for a nation to secure lasting prosperity. It is not an easy balance to maintain, requiring a centralized state that nonetheless is governed by a broad enough coalition that it is not taken over by a narrow elite, and that offers the rule of law as well as freedom of opportunity and the chance for creative destruction that threatens old elites. Only elites and governments that are both relatively secure but also too weak to oppress the people and too divided to present spoil to fight over allow this balance between freedom and security that is necessary for prosperity to flourish. Those nations like China or Argentina that enjoy economic growth without more inclusive and legitimate governments face a stiff barrier and an eventual slide back into poverty. The fact that the success of institutional development depends on very particular and critical moments of history, such as the ability for reforms to withstand reaction, the ability of common people and their governments to resist elites without those governments becoming too strong and too authoritarian, the virtue that rulers lead with that is necessary for success but cannot be taken for granted, suggests that prosperity is a very chancy proposition, depending on virtue as well as the small differences in power that differentiate between absolutist suffering of the masses and a free and pluralistic state that can enjoy sustainable prosperity as long as there remains freedom and a general equality of opportunity.

By presenting a case for the origins of power, prosperity, and poverty that looks at politics and institutions as well as the course of history, the authors both present hope for downtrodden nations as well as a massive challenge for such areas to enjoy real wealth. The authors suggest that while no nation is doomed, nations that have never managed to effectively unite (like Somalia) and those who leadership positions are continually the spoils of quarreling elites that seek domination (like China) will not achieve lasting growth but face strict limits to their prosperity because of the extremes of either anarchy and tyranny. Only those nations that manage to strike a balance and continue to live in virtue can expect prosperity to endure. Without being too moralistic, the book presents a picture of wealth and poverty and their causes in leadership value in biblical terms not unlike the blessings and cursings of Leviticus 26 and Deuteronomy 28. Whether or not that is intentional, it is striking and noteworthy, and a matter worthy of reflection.