Book Review (5/5) – Why Nations Fail: The Origins of Power, Prosperity and Poverty (Daron Acemoğlu, James A. Robinson)
Published in Book Reviews.
Originally published on Goodreads.
There are many sophisticated theories for why certain countries are poorer than others but given the broad distribution of geography and history, none actually stand up to scrutiny.
If the answer is geography, why the difference between Mexico and USA? If the answer is common history then why North and South Korea? If the answer is the automatic effects of post-colonialism, why Botswana vs Zimbabwe?
The answer, according to this book, is to do with the type of economic and political institutions. Not one or the other, but both are crucial to sustained growth and a high quality of living for citizens.
Whilst I think more pages could have been dedicated to types of government (e.g. various forms of capitalism and socialism), the idea that strong property rights and freedom of markets are necessary (but not sufficient) still comes through very clearly.
A very interesting read, especially with the ending thoughts on foreign aid and the importance of focusing on the right areas when considering how to encourage change as part of foreign policy. There is a lot of wasted time and money that could otherwise be avoided if the lessons of history were applied. This book does a good job at explaining them.