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

Jul 28, 2014 Ahmed Gatnash rated it it was amazing · review of another edition

Shelves: history, politics, economics

The aim of this book is ambitious: to come up with a comprehensive theory as to why some nations are rich and some are poor today. And the authors succeed brilliantly; it's probably the best thing since Ibn Khaldun. Their theory links economic and political change and shows why each happened throughout history and how they impacted each other.

Central to the book is the concept of extractive institutions - these are institutions which are designed to extract political power or wealth from the maj The aim of this book is ambitious: to come up with a comprehensive theory as to why some nations are rich and some are poor today. And the authors succeed brilliantly; it's probably the best thing since Ibn Khaldun. Their theory links economic and political change and shows why each happened throughout history and how they impacted each other.

Central to the book is the concept of extractive institutions - these are institutions which are designed to extract political power or wealth from the majority of the population and concentrate it with a minority. They trace these institutions through history, showing the slow drift between the way they worked in different societies around the world and the way critical junctures (such as the black death, the collapse of the Roman empire, the development of Atlantic trade) interacted differently with these institutions because of the drift, leading them to collapse in some countries and become strengthened elsewhere.

This can be mapped very closely to the historical process by which many regions of the world came to be lagging behind Western Europe and America in the 20-21st century even though for most of history it had been the reverse. The theory explains how certain critical junctures led to inclusive institutions developing to replace extractive ones in western Europe rather than the rest of the world, and why ultimately the UK became the birthplace of the industrial revolution and not anywhere else in the world.

The great value of this theory is that it entirely discredits other theories as to why certain countries didn't develop, most of which rest either on poor premises (environmental inferiority, poor climate for living/farming), or on discriminatory ones such as inferiority of culture or certain societies being inherently better. Instead, although the way the world developed is historically contingent it is only through the tiniest of differences and sometimes even coincidences that Europe ended up colonising the rest of the world and plunging it into sustained poverty through strengthening their extractive institutions, and it wasn't, say, Peru that did this. It also disproves the idea in modern neoliberal circles that countries remain poor simply because they do not know how to manage their economies, and only need policy advice in order to modernise and become prosperous. Instead, they show a consistent pattern throughout history in which those in power manage to thwart the development of a dynamic economy because of the fear that the creative destruction it would bring would ruin them, and the more open opportunities for wealth would allow power to be exercised by someone outside their narrow group. This is why railways were discouraged and prevented in Russia and Austria-Hungary for so long, why the Ottomans prevented the use of the printing press and why before the glorious revolution elites in England refused to allow the adoption of technology in industry even when it was invented and ready to be used.

The authors are master story tellers, managing to dispense with the main bits of theory quite early in the book and spending the rest of it developing a highly enjoyable narrative showing the applicability of their theory and its explanatory success on societies through history including the Roman empire, the Ottoman empire, Venice, the Spanish Empire, Britain, USA, Latin America, Ethiopia, Somalia, Sierra Leone, South Africa and Botswana. This edifice of precedents in which the theory fits perfectly is extremely convincing, and challenges you to look for your own examples elsewhere. I only give 5 starts to a book that was paradigm-changing, and this was definitely one of them. ...more

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Nov 01, 2015 Zayd El-basyouni rated it it was amazing

This is one of the most important books in the nations development, I urge all world leaders to read it. While I’m reading it along the past few days I was reflecting the same examples to my home country Libya where the social and the economical infrastructure completely destroyed and such an example of “extractive governments” were the authors argue that this type of government use controls to enforce the power of a select few, while “inclusive governments” create open markets that allow citiz This is one of the most important books in the nations development, I urge all world leaders to read it. While I’m reading it along the past few days I was reflecting the same examples to my home country Libya where the social and the economical infrastructure completely destroyed and such an example of “extractive governments” were the authors argue that this type of government use controls to enforce the power of a select few, while “inclusive governments” create open markets that allow citizens to spend and invest money freely, and that economic growth does not always indicate the long-term health of a country. The good thing about this book was published just right away after the Arab Spring in the region but no one had the chance to review it, The authors started their introduction saying “As we write this preface, North Africa and the Middle East have been shaken by the “Arab Spring” started by the so-called Jasmine Revolution, which was initially ignited by public outrage over the self-immolation of a street vendor, Mohamed Bouazizi, on December 17, 2010. By January 14, 2011, President Zine El Abidine Ben Ali, who had ruled Tunisia since 1987, had stepped down, but far from abating, the revolutionary fervor against the rule of privileged elites in Tunisia was getting stronger and had already spread to the rest of the Middle East. Hosni Mubarak, who had ruled Egypt with a tight grip for almost thirty years, was ousted on February 11, 2011. The fates of the regimes in Bahrain, Libya, Syria, and Yemen are unknown as we complete this preface.”
This book explores the different kinds of social institutions and incentives that nations have applied to encourage prosperity, economic development and elimination of poverty. In the meantime, Steven Pinker argues that social and economic progress feed off each other. However, the only question were all the people can rise is how to implement the “inclusive Government” which can make our life better?
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Dec 15, 2014 Ahmed Amir Neihoum rated it really liked it

The book Takes many historical examples from the Mayan empire, to the Roman, Othoman and more recently British empires among many others to prove his central theme of what he believes is the key ingredients for the success of any nation. The book can become very long and tedious. It will keep you going because of the wealth of insights the writers research and present in the book of civilisations past and present.

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Dec 27, 2015 Shahd Bensaoud rated it liked it

لأكون صريحة لم اقرأ الكتاب كاملاً حيث انني لم احصل على نسخة منه، ولم اجد ترجمة عربية. لكن استمعت لملخص عن الكتاب كان جداً قيم من وجهة نظري ويوضح اهم أهداف الكتاب والنظرية التي يحاول إثباتها والتي تقول ان فشل الامم او نجاحها او مقدار ثروتها ليس بالضرورة جغرافياً او ان شعبها افضل بل ذلك يعتمد على مؤسساتها وسياساتها.
يبدو ان الكتاب جداً شيق حيث انه استخدم العديد من الأمثلة التاريخية والحالية ليدعم نظريته. تعرض الكتاب لبعض الانتقادات ولكن يظل مصدر جيد. سأقرأه كاملا حينما تسنح لي الفرصة لذلك.

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