Dr. Ruger MW 12:30
Why Nations Fail Review
The issue of human welfare and its large international inequality has long been debated between economists, and is supported with several different theories. In their book Why Nations Fail, Daron Acemoglu and James Robinson provide their compelling theory as to why there is such a growing gap in wealth across the globe. The foundation of their theory is based on the types of political and economic institutions that have been implemented by colonial nations, starting from the discovery of the America’s by Spain and Portugal. Based on the established governments, these institutions may either spark incentive for prosperity, or strip any motivation for labor and economic productivity. Acemoglu and Robinson use solid examples in history in order to describe why there are differing institutions that exist today; however, they did not provide a sufficient remedy based on their theory, which is disappointing for such an intriguing issue. In Why Nations Fail, the authors appropriately provide the statistic of purchasing power for the currencies of Afghanistan and Zimbabwe, which helps give a vivid idea of the amount of poverty these poorer countries must endure. The reason for this continuously widening gap between rich and poor countries is explained by the different economic and political institutions that were implemented in them, either providing prosperity or poverty. First, understanding what the author’s definition of a political institution is helps clarify some of the more in depth detail introduced later. Acemoglu and Robinson define it as such, “Political institutions determine who has power in society and to what ends that power can be used”(pg.80). They further explained that these political institutions influence economic institutions, allowing whoever has the power to create policies of exploitation or prosperity. These political and economic institutions were given two distinct classifications...
Please join StudyMode to read the full document