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

by Daron Acemoğlu

work regime of draconian severity for English settlers—though

The new model of colonial development entailed the Virginia Company owning all the land.

It could not coerce the English settlers into hard work at subsistence rations.

Starting in 1618, a dramatically new strategy was adopted. Since it was possible to coerce neither the locals nor the settlers, the only alternative was to give the settlers incentives.

“headright system,”

1619 a General Assembly was introduced that effectively gave all adult men a say in the laws and institutions governing the colony.

In 1632 ten million acres of land on the upper Chesapeake Bay were granted by the English king Charles I to Cecilius Calvert, Lord Baltimore.

The Charter of Maryland

a detailed plan for creating a manorial society,

Another similar attempt was made later in 1663, with the founding of Carolina by eight proprietors,

Fundamental Constitutions of Carolina.

landgraves and caziques,

because there were simply too many options open to them in the New World. Instead, they had to be provided with incentives for them to want to work.

In 1691 the assembly induced the king to declare Maryland a Crown colony,

South Carolina became a royal colony in 1729.

In all cases there was a governor, and an assembly based on a franchise of male property holders.

First Continental Congress in 1774,

In February 1808, Napoleon Bonaparte’s French armies invaded Spain.

Here the Junta formed a parliament, called the Cortes. In 1812 the Cortes produced what became known as the Cádiz Constitution, which called for the introduction of a constitutional monarchy based on notions of popular sovereignty.

created a constitutional crisis throughout colonial Latin America.

many Latin Americans began to form their own juntas.

The first declaration of independence took place in La Paz, Bolivia, in 1809, though it was quickly crushed by Spanish troops sent from Peru.

In Mexico the political attitudes of the elite had been shaped by the 1810 Hidalgo Revolt, led by a priest, Father Miguel Hidalgo.

In 1815, as Napoleon’s European empire collapsed, King Ferdinand VII returned to power and the Cádiz Constitution was abrogated.

Ferdinand was forced to restore the Cádiz Constitution and recall the Cortes.

the elites there decided that it was better to go it alone and declare independence.

This independence movement was led by Augustín de Iturbide,

On February 24, 1821, he published the Plan de Iguala, his vision for ...

he quickly took advantage of his military backing to have himself declared emperor,

a dictator, and by October 1822 he had dismissed the constitutionally sanctioned congress and replaced it with a junta of his choosing.

These were to be allocated on the basis of a state’s population, but the congressional representatives of southern states then demanded that the slaves be counted.

The conflicts between the North and South of the United States were repressed during the constitutional process

the Missouri Compromise, an arrangement where one proslavery and one antislavery state were always added to the union together,

Civil War

Mexico experienced almost nonstop instability for the first fifty years of independence.

Antonio López de Santa Ana.

Valentín Gómez Farías

Miguel Barragán.

loss of the Alamo and Texas and the disastrous Mexican-American War,

Such instability led to highly insecure property rights. It also led to a severe weakening of the Mexican state, which now had little authority and little ability to raise taxes or provide public services.

The patent system, which protects property rights in ideas, was systematized in the Statute of Monopolies legislated by the English Parliament in 1623,

The striking thing about the evidence on patenting in the United States is that people who were granted patents came from all sorts of backgrounds and all walks of life,

Thomas Edison,

Just as the United States in the nineteenth century was more democratic politically than almost any other nation in the world at the time, it was also more democratic than others when it came to innovation.

During the nineteenth century there was a rapid expansion of financial intermediation and banking

the intense competition among banks and financial institutions in the United States meant that this capital was available at fairly low interest rates.

there was practically no competition among Mexican banks.

Porfirio Díaz.

Carlos Slim

This inequality doesn’t just have consequences for the lives of individual people in poor countries; it also causes grievances and resentment, with huge political consequences in the United States and elsewhere.