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

Summary

The book «Why Nations Fail: The Origins of Power, Prosperity, and Poverty» by Daron Acemoglu explores the reasons behind economic inequality among countries. The authors argue that political and economic institutions play a crucial role in this. They categorize institutions as either inclusive or extractive. Inclusive institutions promote economic growth by ensuring property rights, the rule of law, and equal opportunities. In contrast, extractive institutions focus on resource extraction for the benefit of elites, leading to stagnation and poverty. The book illustrates these ideas with historical examples and analyzes how changes in institutions can lead to economic prosperity or decline.