Why Nations Fail

Introduction

Nowadays, there are different countries on the planet, which differ from their counterparts in population, culture, geographical, economic and political characteristics, and others. The process of development is present in all of them but some states manage to perform well granting civil rights, freedoms, and social benefits whereas others fail to do it. There is an opinion that geographic location, climate, culture, and other aspects that are given to a country in a historical process strictly regulate these issues, which is why such an aspect as national poverty is predetermined. However, the authors of the book Why Nations Fail: The Origins of Power, Prosperity and Poverty strongly disagree with this statement. Their book is devoted to the analysis of factors, which lead either to the sustainable development of a nation, or its gradual economic demise. This paper is devoted to the analysis of the book, and evaluation of the validity and reasonability of authors’ claims, arguments, and evidence. It presents the analysis in several sections that aim at summarizing the main ideas of the book and revealing its methodological strengths and weaknesses. Moreover, it critically evaluates the empirical evidence presented by the scholars and concludes with a discussion of overall impressions of the analyzed source. Therefore, the book review reveals that in order to prove their position, the authors refer to various historical precedents and current economic and political statistics worldwide. This evidence allows them to demonstrate that specific political institution of a country trigger social and economic progress. Thus, the overall democratic influences within a nation and the state power that grants civil freedoms, a plurality of the social opinion, justice, and the existence of private enterprises lead a state to prosperity. At the same time, the evaluation of the main argument of the book reveals that although the authors provide relevant examples and judgments they fail to contrast them with the claims of the opposing scholars, which reduces the objectivity of their research.

Why Nations Fail: The Origins of Power, Prosperity, and Poverty

Summary

The book consists of fifteen sections with the major part analyzing various causes of the sources of the state power, factors that influence national poverty and prosperity and supporting the arguments with the historical and contemporary evidence. As a result, a certain part of the book analyzes the history of the development of different nations whereas other parts include the investigation of contemporary states. For example, the aim of the first chapter, “So Close and Yet So Different” (Acemoglu & Robinson, 2012, p. 18) is to oppose the idea that geography and cultural aspects of the societies predetermine their potential to become poor or prosperous. In order to approve this claim, the authors give examples of modern communities as well as their predecessors. Some examples consider present-day communities such as the city of Nogales in the US and Mexico whereas others compare totally different communities of Egypt, the UK, and etc. (Acemoglu & Robinson, 2012). The reason for such broad and differentiated comparisons is the authors’ attempt to justify or oppose the claims of their opponents that the nations’ prosperity is predetermined by natural factors (Acemoglu & Robinson, 2012, p. 15). However, the focus of the book is the attempt of rationalizing and explaining the authors’ point of view through diverse examples and comparisons.

Furthermore, the book analyzes political factors that lie behind the nation’s poverty presuming that the will of the political authorities predetermines economic development in different countries. In this sense, the scholars tie the factors of prosperity and poverty with the presence and work of specific social and political institutions that create beneficial social and economic incentives. At the same time, the chapter “Small Differences and Critical Junctures” is devoted to the analysis of the nature of political institutions and how they change through a political conflict. In this respect, a useful idea of the book is that a plurality of opinions creates a balance of the political life of a country (Acemoglu & Robinson, 2012). As a result, some nations establish democracy in their communities, which allows people to choose their authorities freely and to remove those, who are not successful or are corrupt. In contrast, the countries that have one dominant political power, are endangered by a perspective of losing social freedoms, which in turn, leads to exploitation of the population by a political elite.

Further chapters of the book are devoted to the cross-historical analysis of the politics and economy of the countries in different ages and cultural spaces in order to find similar traits in their development. For instance, the authors compare and contrast Stalin and King Shyaam in order to reveal the social and economic influences of an autocratic ruler (Acemoglu & Robinson, 2012). Also, they use the results of the historical analysis in order to perform economic predictions for such countries as China, which has been experiencing a significant economic boost throughout recent decades. Afterward, the book reveals positive aspects of European colonialism and the Industrial Revolution presuming that these influences led to the creation of political institutions that benefited diverse nations. The authors presume that Industrialization was one of the factors that increased the differences between more and less economically successful countries (Acemoglu & Robinson, 2012). As a result, such countries as former Britain and the US obtained a serious economic boost, which was intensified by new tendencies in banking and social spheres. In addition, the political framing of these countries was more favorable to private entrepreneurs in contrast to such countries as Mexico, Peru, and others. For example, the authors claim that the introduction of a patent system in the US was one of the causes of Thomas Edison’s success in business (Acemoglu & Robinson, 2012, p. 33). More than that, due to the loyalty of the political and financial system of the US, he obtained support from the local investors, which was impossible for Latin American countries. The authors explain that countries such as Mexico had no opportunity for supporting local representatives of small businesses due to the lack of interest in the political elites (Acemoglu & Robinson, 2012). Thus, they preferred extensive development to the intensive one, developing such areas as human exploitation and shipping raw materials to industrialized countries. At the same time, the authors also present the historical cases related to the 20th century, which describes the development of such countries as the North and South Koreas, Germany split into the two states during the Cold War and so on. The authors are convinced that the struggle of the least developed countries for economic sustainability is useless unless they start developing democratic institutions. Therefore, each of these examples supports the idea that with the lack of democratic influences and organizations in these countries one can see almost no sustainable economic progress.

Finally, the last chapters of the source are devoted to the analysis of the systemic factors that form each state and regulate the possibility for a nation to prosper. Thus, chapters 13, 14, and 15 are devoted to the structural economic analysis of the states, which involves the evaluation of diverse institutions presented in different countries. Moreover, they give an example of the states that managed to combat poverty and evolved into economically successful countries. The last chapter of the book is the climax of the book as it summarizes all the presented ideas, arguments and examples attempting to understand the drawbacks of national policies, which lead to economic stagnation and collapse. Consequently, the authors practice a systemic approach creating an analytical framework where every claim is supported by real-life evidence that serves to validate the thesis of the book.

Strengths and Weaknesses

Furthermore, there is a need for presenting a deeper analysis, which would reveal the theoretical and methodological strengths and weaknesses. First, the benefit of the book in this sense is a systematic approach, which makes the presented materials cohesive and coherent although the analysis embraces a period of more than five hundred years. For instance, the scholars start the investigation with a local area in the US and Mexico, the city of Nogales, where a similar community is located between the two states. The role of this example is critical because it serves as an opposition to the statements that the success of the nations is predetermined by exterior factors. Stating that the average income of the US community is about $ 30.000 a year, which is enhanced by a wide range of social services, the authors present it as a prosperous though imperfect community (Acemoglu & Robinson, 2012). In contrast, the Mexican part of the city has different social problems that include a lack of social services, poor education, sanitation, low wages, and etc. As a result, the authors question, “How could the two halves of what is essentially the same city be so different?” (Acemoglu & Robinson, 2012, p. 20). The analysis extends to the two continents, the North and South Americas, during the ages of their colonization. Similarly to the case with the city of Nogales, the authors argue that initially geography and the social and economic conditions of the first settlers on both continents were equal. However, the actions of some of the colonists were more successful in contrast with the others. For example, the success of Spaniards in the military conquest of Aztecs drastically altered from the struggle of the English settlers with the ingenious population of American Indians (Acemoglu & Robinson, 2012, p. 31). However, diverse social and political transformations of the British Empire and the former states of the contemporary US allow the latter evolving into a country with the highest socio-economic standards. In contrast, in Mexico, the rule of corrupted governments, which were interested only in individual benefits, severely restrained the progress of the country leaving it democratically disadvantaged.

Similarly to the case with the city of Nogales, the scholars expand their analytical focus and shift to countries such as North and South Korea. The basic reason for resorting to these examples is the author’s attempt to searching for ideal conditions that oppose the claim of their counterparts that countries may be prosperous due to cultural space. Thus, in the given countries, the cultural space was similar due to cultural roots, but their development has been increasingly altering due to the fact that South Korea chose a democratic way of development. Therefore, the arguments in the book seek both contemporary and historical examples of evidence that makes the authors’ thesis reliable.

Another benefit of the book is the presence of the analysis of the leader’s role for the nation by analyzing such individuals as Joseph Stalin in the USSR or Hosni Mubarak in Egypt. This example is the attempt to demonstrate the negative role of the absence of democratic institutions through the analysis of an autocratic framework, where the state power is ceased not by a political elite but a single leader. In this respect, the book states that such tyranny inevitably leads to failure and a series of revolutions similar to the collapse of the USSR or the “Arab Spring” events (Acemoglu & Robinson, 2012). Similarly, the scholars investigate the role of economic events and financial institutions, which exist in a democratic country and its less politically beneficial counterparts. Therefore, the content of the book is logically structured, coherent, cohesive, and all these factors serve to validate the idea provided by the authors.

At the same time, one presumes that the authors could have enhanced the argumentative framework of the source. The reason for it is the absence of concrete criteria giving an advantage to the historical and modern comparative analyses. For instance, it might have been more useful to analyze every example that assesses the role of cultural similarity of a community shifting afterward to other factors. The example of these factors may include democracy, geographic location, military strength, scientific progress, and others. Thus, the authors failed to analyze every criterion separately, which is why their argumentation is rather disseminated in various chapters. Consequently, although the analytical framework of the book is present, its main criterion, which is history, does not suit for disproving the arguments of their opponents.

Last, the authors’ style and voice lead the reader towards rather controversial impressions due to the failure to choose an appropriate manner of explaining a serious economic topic. Thus, one presumes that as any scholarly source, the book ought to have more statistical and economic analysis. In contrast, it seems that the scholars briefly analyzed every example with the aim of its adequate placement within a selected framework among other not appropriately developed strategies. As a result, the content of the book might seem rather challenging for an individual, who is not experienced in the economy, but it is not thorough enough to be considered valuable scientific research. Therefore, although the analyzed piece seems to be methodologically perfect, a deeper analysis reveals its analytical and theoretical drawbacks, which also arouse doubts regarding some presented facts.

Critical Analysis

Although the evidence presented in the book Why Nations Fail: The Origins of Power, Prosperity and Poverty seem to be valid, one presumes that the authors’ selection of the scope of evidence lacks cases for a more objective analysis. Overall, the scholars’ presentation of the material giving both narrow and broad regional and historic examples may be characterized as a positive practice that enhances the validity and relevance of the research. However, the rigor of the study lacks cases that might be presented by their opponents. In this sense, opposing the claims of other scholars, the authors focus on their theory instead of giving more space to the discussion of the opponents’ arguments and evidence. For example, when describing the economic and political climate in the Middle East, scholars mainly analyze the cases of Saudi Arabia, Kuwait, Iran, Iraq, and similar countries. They claim that in general people speculate on the topic of oil-producing countries in the Middle East stating that all countries are located in deserts, have similar Islamic cultural space but the oil-producing ones are more prosperous (Acemoglu & Robinson, 2012). Opposing this argument, they state that “oil producers are richer, but this windfall of wealth has done little to create diversified modern economies in Saudi Arabia and Kuwait” (Acemoglu & Robinson, 2012, p. 61). However, they fail to mention the fact that the UAE has the same geographic location and even graver political space due to the fact that it is governed by the king under the law that is similar to Shari law. This country is one of the richest in the world, but it has become rich mainly due to the oil-refining industry. Moreover, unlike Kuwait, it is a strong strategic partner of the US in the Middle East, which is why no one is going to attack it, unlike Iraq, Iran, or Syria. Similarly, they mention that the US annexed Texas (Acemoglu & Robinson, 2012, p. 32) without giving attention that it was an external influence which led to the fact that Mexico lost its potential industrial region. Therefore, the researchers seem to neglect one more factor, which is the role of international partnership with countries such as the US in economic development. An opposite example of this fact is that North Korea is not a partner of the US as well as other countries of the world. Currently, it is under severe international sanctions that restrain its technological and political progress. Consequently, international isolation may also seem to be the factor to be considered when describing the aspect of national wealth.

Furthermore, when discussing the examples of diverse personalities, the scholars argue that the success of the ones in the developed countries was due to the lack of democracy. Their major idea was that democratic institutions gave people education and a favorable financial climate (Acemoglu & Robinson, 2012, p. 43). One presumes that these claims are valid as similarly to those that a Mexican billionaire Warren Buffet became one of the riches because of abusing his power and using Mexican law to create a monopoly (Acemoglu & Robinson, 2012, p. 44). However, there might be also a cultural impact because such individuals as Gates and his US counterparts accept the US ethical and cultural values, which is why they would not try to cease all the financial power in the country. The claim is supported by the fact that Buffet attempted to enter the US market but failed because he was searching for the ways to oppose the democratic principles of the US. Therefore, one suggests that Buffet is likely to possess some individual or nation’s values which lead him towards the abuse of the political climate in the country. Last, one of the issues that affect the overall evaluation of the book is that the authors analyze the causes of national poverty and prosperity and highlight the facts that harm the nations giving no solutions. As a result, the analyzed source has no potential for having any practical power but may be used only for comparative historical analysis in economy and politics.

Overall Impressions

Characterizing the individual impressions of the book, one should say that they are controversial because although it has useful information it did not meet my expectations in general. Thus, the source is written in a manner that balances the scholarship and popular literature, which is good for an average reader that is experienced in the economy. However, one suggests that scholars would not use it as a source because of its manner of narration and surface analysis although it might seem too complex for a reader, who is not skilled in politics and economy. Moreover, the source has no practical implications, which does not suit me personally as I value sources that propose solutions together with the analysis and critique. Thus, overall, the book Why Nations Fail: The Origins of Power, Prosperity, and Poverty is a good choice for an individual, who wants to enhance his or her knowledge in national and international politics and economy. However, after reading this book, one has to consider the opinions of the opponents of Acemoglu and Robinson in other sources because they are poorly presented and lack objective evaluation.

Conclusion

Summarizing the presented information, we arrive at the conclusion that the book Why Nations Fail: The Origins of Power, Prosperity and Poverty by Acemoglu and Robinson provides a valuable insight into the national and international economy and politics. Its positive aspects are the analytical approach and the range of examples of different scales that incorporate the history of the societies throughout more than five hundred years. Moreover, the scholars consider various factors that allow them to decide that nations’ poverty and prosperity are not predetermined naturally, geographically or in any other way. In contrast, they claim that the presence of population-friendly state structure, policies and institutions critically impact the development of diverse states either restraining or boosting them. At the same time, the critical analysis of the source revealed specific flaws of the scholars’ theory such as selective argumentation and lack of objective evidence. Therefore, one presumes that the main argument of the book lacks objective comparative analysis because the authors do not consider the claims of opposing researchers substantially and give too much space to the presentation of their idea.