I’ve just started reading it and I have yet to find the underlying argument compelling.
Funnily enough, many of the reviews of this book are that it’s “readable!” Which I would absolutely agree! The history is for sure interesting. However I do think they’ve missed the mark as to *why nation’s fail.*
ItsAllAGame_ on
It’s definitely worth reading.
A lot of the reaction to it comes down to separating the core idea, the storytelling, and how airtight the explanation actually is.
The book makes a strong, simple claim of long-run differences in national prosperity are mainly driven by institutions. “Inclusive” institutions (secure property rights, political pluralism, constraints on elites) tend to support investment and innovation, while “extractive” ones concentrate power and wealth and ultimately suppress sustained growth.
Where the book is especially effective is in its narrative. It uses historical case studies (colonial Latin America, England vs. Spain, North vs. South Korea) to make their argument intuitive. That’s a big part of why it’s readable.
But where is falls short is that the argument can feel more decisive than the evidence allows. There are ongoing questions about causality (do institutions drive development, or does development reshape institutions?), selection of examples, and how to interpret cases like China, where strong growth has occurred under clearly non-inclusive political institutions.
So the real split is that the book is influential in shifting mainstream thinking toward institutions as a central factor in development, but it’s still one framework among several, not a settled explanation of “why nations fail.”
EconomistWithaD on
It’s a good book; readable.
It’s based on a series of papers, starting with one in 2001, that used some new-ish econometric techniques to explain differences in outcomes, which were based on settler mortality (if settler mortality was high, the colonizing country set up extractive institutions led by natives; if it was low, they colonized and set up inclusive institutions, because they were part of the country now).
But, he was one of the first major economists to develop institutions as a framework for analyzing economic outcomes.
bry0816 on
It’s been a while since I read it My main memory is that it’s very readable for the genre/subject and that it made me think about the subject
RepublicIll6087 on
I didn’t think it said anything that wasn’t quite obvious. The idea basically is if countries are corrupt then they don’t receive the investment they need and it becomes a cycle and overtime the country falls behind its peers.
Saying all of that the two authors are qualified to talk on the subject and it’s worth reading. Wasn’t the best book I have read. But I didn’t regret buying it.
Tricky_Condition_279 on
I found it quite compelling and highly recommended it. If you try to summarize it as inclusive v. extractive institutions it sounds simplistic, yet that’s not what I took away. The value is in explaining the historical and cultural contexts that lead to inclusive/extractive institutions. For example, I never thought about the history of patronage in Spanish culture before reading that book and I think about it often now in the context of Latin America. While not earth shaking to eg a historian, I found it illuminating coming from STEM. There are some weak arguments, especially in the dismissal of the ecological hypothesis. They compare cities on adjacent sides of the US-Mexico border and claim that it’s an apples-to-apples comparison eliminating ecology as a factor, yet the favorable ecological setting of the US as a whole (breadbasket) does not have to be local to be impactful. Do read the book. It’s an absolute favorite of mine.
RepublicIll6087 on
Boomerang was very interesting. It’s been a while since I read it. It’s on the subject of how the 2008 recession came to be in different countries. The US might have trigged it but a lot of countries screwed up in their own way. It was written by the guy given the task by the European Union to fact find on it causes. ( memory is hazy might be another organisation.) Freakenomics, the original not 2 was very good. Second wasn’t as interesting.
The problem with actual books on the subject of economics is they are a little dry to say the least. If you’re interested in the subject there is a very good YouTube channel -economics explained-.
It’s where the recommendation for – why nations fail- came from for me. I’ve no idea his qualifications but he does seem to have a solid grasp of the subject.
7 Comments
I’ve just started reading it and I have yet to find the underlying argument compelling.
Funnily enough, many of the reviews of this book are that it’s “readable!” Which I would absolutely agree! The history is for sure interesting. However I do think they’ve missed the mark as to *why nation’s fail.*
It’s definitely worth reading.
A lot of the reaction to it comes down to separating the core idea, the storytelling, and how airtight the explanation actually is.
The book makes a strong, simple claim of long-run differences in national prosperity are mainly driven by institutions. “Inclusive” institutions (secure property rights, political pluralism, constraints on elites) tend to support investment and innovation, while “extractive” ones concentrate power and wealth and ultimately suppress sustained growth.
Where the book is especially effective is in its narrative. It uses historical case studies (colonial Latin America, England vs. Spain, North vs. South Korea) to make their argument intuitive. That’s a big part of why it’s readable.
But where is falls short is that the argument can feel more decisive than the evidence allows. There are ongoing questions about causality (do institutions drive development, or does development reshape institutions?), selection of examples, and how to interpret cases like China, where strong growth has occurred under clearly non-inclusive political institutions.
So the real split is that the book is influential in shifting mainstream thinking toward institutions as a central factor in development, but it’s still one framework among several, not a settled explanation of “why nations fail.”
It’s a good book; readable.
It’s based on a series of papers, starting with one in 2001, that used some new-ish econometric techniques to explain differences in outcomes, which were based on settler mortality (if settler mortality was high, the colonizing country set up extractive institutions led by natives; if it was low, they colonized and set up inclusive institutions, because they were part of the country now).
The paper is [here](https://www.aeaweb.org/articles?id=10.1257/aer.91.5.1369). Widely cited and read; highly influential, though it’s conclusions and analysis have come under fire (maybe it’s not as causal as thought).
But, he was one of the first major economists to develop institutions as a framework for analyzing economic outcomes.
It’s been a while since I read it My main memory is that it’s very readable for the genre/subject and that it made me think about the subject
I didn’t think it said anything that wasn’t quite obvious. The idea basically is if countries are corrupt then they don’t receive the investment they need and it becomes a cycle and overtime the country falls behind its peers.
Saying all of that the two authors are qualified to talk on the subject and it’s worth reading. Wasn’t the best book I have read. But I didn’t regret buying it.
I found it quite compelling and highly recommended it. If you try to summarize it as inclusive v. extractive institutions it sounds simplistic, yet that’s not what I took away. The value is in explaining the historical and cultural contexts that lead to inclusive/extractive institutions. For example, I never thought about the history of patronage in Spanish culture before reading that book and I think about it often now in the context of Latin America. While not earth shaking to eg a historian, I found it illuminating coming from STEM. There are some weak arguments, especially in the dismissal of the ecological hypothesis. They compare cities on adjacent sides of the US-Mexico border and claim that it’s an apples-to-apples comparison eliminating ecology as a factor, yet the favorable ecological setting of the US as a whole (breadbasket) does not have to be local to be impactful. Do read the book. It’s an absolute favorite of mine.
Boomerang was very interesting. It’s been a while since I read it. It’s on the subject of how the 2008 recession came to be in different countries. The US might have trigged it but a lot of countries screwed up in their own way. It was written by the guy given the task by the European Union to fact find on it causes. ( memory is hazy might be another organisation.) Freakenomics, the original not 2 was very good. Second wasn’t as interesting.
The problem with actual books on the subject of economics is they are a little dry to say the least. If you’re interested in the subject there is a very good YouTube channel -economics explained-.
It’s where the recommendation for – why nations fail- came from for me. I’ve no idea his qualifications but he does seem to have a solid grasp of the subject.