11 of 11 people found the following review helpful
Connection to Juggernaut?,
This review is from: Why Nations Fail: The Origins of Power, Prosperity, and Poverty (Hardcover)
There is a current in modern political economy that says countries succeed because of their natural resources and their control over others. Countries fail because they lack natural resources and are controlled by others. This current is best characterized by Jared Diamond's Guns, Germs and Steel and Collapse.
WHY NATIONS FAIL is in large part a contra to this current, and reintroduces the theme that institutions matter more than the natural resources and land, and so it should be institutions that are most important when we look at why countries succeed or fail (and how to improve the latter). The primary reason the authors claim that the old current is wrong is that it can be seen in the past--there have been many countries with plenty of resources that have failed. Likewise, there have been plenty of countries with minimal resources that have succeeded. The answer must come elsewhere.
Obviously, it helps to have natural resources, but it is much more important what the people do with those resources. The authors of this book show that countries with "inclusive" political institutions--institutions which are pluralistic and democratic in nature--are capable of providing incentives for the people to be industrious and thus prosperous. Meanwhile, countries with "exclusive" political institutions--institutions which are extractive and exploitative in nature--are incapable of providing such incentives and thus fail to become industrious and prosperous.
The thesis is very reminiscent of another book on this topic, Juggernaut: Why the System Crushes the Only People Who Can Save It, which also has as its central thesis this very notion. I would recommend it if you want to get a more concrete explanation of how exactly the mechanics of open economies work--from independence to private property to industry and free trade.
If there was a single gripe I would have with WHY NATIONS FAIL, it is that the authors don't spend enough time investigating how we, the United States, and other western nations, are actually taking on some of the characteristics that make other nations fail, why we are doing this, and how to correct it. They are content to focus on the failures of other countries--which makes complete sense. But it is necessary to keep this in mind as we, ourselves, are proving this theory correct--and not in a good way.
Ultimately, the book is crucial in this political climate, and key to anyone's understanding of how a successful country comes about.
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Showing 1-2 of 2 posts in this discussion
Initial post: May 24, 2012 9:11:48 PM PDT
Have you read "The Institutional Revolution: Measurement and the Economic Emergence of the Modern World"? It provides, perhaps, a more subtle argument for the importance of institutions in the creation of wealth.
In reply to an earlier post on Jun 11, 2012 4:44:20 AM PDT
John R. Smith says:
Looks excellent. Am checking into it currently.
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