To Acemoglu and Robinson, the economic prosperity of a nation is a direct function of its political institutions, which in turn are dependent only on historical contingencies. "Extractive" political structures create an economy only to benefit the small ruling class (and therefore are extremely hostile to the wealth-creation of creative destruction, which can only harm the interests of this ruling class. "Inclusive" political institutions, on the other hand, create incentives for large-scale prosperity, etc. To my mind "extractive" and "inclusive" are defined so vaguely that the authors can only tell empty "just-so" stories when using them to explain the history of this or that nation, but I suspect their more academic work, upon which the book must be based, may offer more rigorous definitions. (They also misuse Michel's "Iron Law of Oligarchy," which is an iron (i.e. inevitable) process. If they had used it the right way, it might have led to a more productive engagement with elite theory.)

I think the failures of our nation-building projects in Iraq and Afghanistan have, rightly or wrongly, brought a lot of discredit on this way of thinking. My impression is that all of the interesting intellectual work these days is in figuring how and why different people are different, rather than assuming they're the same and then trying to work from there.