Why do some nations fail and other prosper?
From the very beginning of history till nowadays the question of “why do some nations fail and others prosper” has always been one of the cornerstones of political and economic debates. One of the Nobel Laureates, Robert Lucas said that if you started to think about this question, you should stop thinking anything else and only focus on the question. By working so hard and thinking deeply, some scholars have provided a number of valuable notions about this question and among those scholars, two of them : Daron Acemoglu and James Robinson are known as the best ones as they wrote a book so called “Why nations fail” in the context of the origins of power, prosperity and poverty. In this book, the authors highlight the significance of effective political institutions for any nation not to fail and develop fast. As other approaches to this issue, for instance, Thomas Malthus ties the problem of not prospering to the issue of overpopulation; on the other hand Adam Smith was claiming that the difference between poverty and wealth depended on the matter of the relative freedom of the markets and so on. To sum up, the rises and falls in the history of some nations have always been unescapable and the role of political institutions, geography, economic governance, historical events such as revolutions, becoming colonies have been the distinguished features of this ongoing problem.
In the book of “Why nations fail”, Daron Acemoglu and James Robinson divide political institutions into parts therefore; on the one hand, there is “extractive institutions” which block the growth of a nation, on the other there is “inclusive institutions” which do not. For instance, if we compare two Korean countries, we can see that South Korea has become such a powerful country over years because of her inclusive political institutions, meanwhile North Korea has a fully dictatorship regime that blocks her growth....
References: Acemoglu, Daron and James Robinson (2012): Why Nations Fail, Crown Business
Boldrin, Michele and David Levine (2008): Against Intellectual Monopoly, Cambridge U
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