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

Aug 05, 2015 Akshat Upadhyay rated it it was ok

Shelves: read-in-2015

Too repetitive, this book though providing a wide array of examples, keeps on harping the same tune over and over again. Yes I get it, inclusive political institutions are better than extractive ones (duh) but there is no need to hammer it for a swathe of almost 500 pages. This idea could have been wrapped up in one or max two chapters. Poor attempt

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Sep 16, 2022 Gizem Kendik Önduygu rated it really liked it · review of another edition

Shelves: civil-society

Ne zamandır rafta, anca okuyabiliyorum. Çok gecikmiş bir okuma, farkındayım.

İradenin tek bir kişide toplandığı canım ülkemde yaşarken bu kitabı okumak çok moral bozucu. Daron, inatla ekonomik büyüme için kurumların kapsayıcı olmasından bahsediyor. Kalkınma için önüme koyduğunuz tüm teorilere baktım: coğrafya, kültür, cehalet. Sorun buralarda değil, kurumlarınızın dışlayıcı olmasında diyor.

Kapsayıcı ekonomik kurumlar derken neyden bahsediyor? Toplumdaki bireylerin yetenek ve becerilerini en iyi ...more

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May 21, 2012 Daniel rated it it was ok

Shelves: read-in-english, development

This book has a few very interesting ideas that certainly deserve to be discussed and researched further. It could have been a good book if the authors would have been more modest and had more carefully researched their case-studies.
Unfortunately it has some serious shortcomings.

- It does not provide a definition of extractive institutions. The term is applied to institutions that in one way or another prevent incentives to work hard, innovate and invest - ranging from outright appropriation o This book has a few very interesting ideas that certainly deserve to be discussed and researched further. It could have been a good book if the authors would have been more modest and had more carefully researched their case-studies.
Unfortunately it has some serious shortcomings.

- It does not provide a definition of extractive institutions. The term is applied to institutions that in one way or another prevent incentives to work hard, innovate and invest - ranging from outright appropriation of all surplus production in pre-colonial Congo to high tax rates in the Ottoman Empire (one half to two thirds). As a result, it is unclear when institutions are extractive or inclusive. Modern European states have effective tax rates that are similar to the Ottoman Empire - are they extractive then? Are Singapore's political institutions extractive because there's almost no opposition in the parliament or even the media? If they are, why is it economically so successful as one of the richest countries in the world?

- The authors seem to pick examples from history that nicely fit their ideas. They find evidence for extractive institutions when countries are unsuccessful and evidence for inclusive institutions in successful countries. Obviously they didn't want to include Singapore because it contradicts their ideas, or a more careful look at South Korean institutions that I mention below. They even try to interpret the institutions of stone age and Maya societies, for which we have extremely limited records. We don't know what led to the demise of the Mayas. Extractive institutions may have led to their impoverishment but how can they explain that the Maya completely disappeared?

- Some of the case studies are sketchy at best. They present development trajectories in general (as in South and North Korea) or focus on a few political events. For me this was most obvious in the case studies of the Koreas. Of course South Korea is depicted as the successful country with inclusive institutions, set against the failure of extractive institutions in the North. First of all, the authors' statement that they were the economically the same before division is wrong, there were significant differences in industrialization. The authors also somehow forgot to mention that South Korea underperformed during the 1950s and 1960s while North Korea was booming. Finally and most importantly, I doubt how inclusive institutions in South Korea have really been (again there is no clear definition so you can't be sure anyway). Park Chunghee heavily relied on state management, long-term economic planning and the channeling of capital to a number of key conglomerates usually controlled by families. These conglomerates (chaebol) still dominate the economy and make it difficult for new companies to gain a foothold in industry. South Korea has also seen its share of corruption - often involving these same conglomerates. Still, the authors present it as a great example of inclusive institutions.

- I didn't find their discussion of China convincing either. They argue that growth can't last (partly) because China has not developed any completely new technologies and that there has been no "real innovation". I don't know what their idea of "real innovation" is. But if you look at the economic history of Japan and South Korea you will see that they have been relying mostly on process innovation, meaning that they adopted technologies and made production more efficient or faster or both (without creating completely new products, which is known as product innovation). And process innovation is exactly what China has been doing very successfully and continue to do if it manages to move up to higher value-added industries, just as Japan and South Korea have.
...more

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