Saturday, April 5, 2014

Why Nations Fail by Daron Acemoglu & James Robinson

The title is intriguing.  Does this book reveal the secrets of national economic success?  Point out things that lead to national poverty?  Read on.
  It is an infuriating read.  Glittering generalities, vague language.  Few real examples.  Some of the few examples given are plain wrong.  Other examples are taken from obscure times and places unfamiliar to all but a few specialists.  The authors settle down to condemning "extractive policies" and praising "inclusive policies" without either defining these ideas or giving many examples.  They do tell us how the Spanish Conquistadors stuck it to the conquered Indians, but that is about it for examples.  They speak disparagingly about Jared Diamond's theory but it is clear that they don't understand what Diamond was saying.  They claim the English Civil War was a turning point that set England upon the course to the industrial revolution.  But they don't discuss the sides, the issues, the winners, the losers, the connection with the industrial revolution, or the outcome.  
   The thesis of the book is that national wealth or poverty is determined by government policy, but things break down there.  "Inclusive policies" adopted by governments lead to wealth, extractive policies lead to poverty.  Which sounds like  " The gostalk distims the doshes" to me.  The best examples given are the two Korea's, and an obscure town on the US-Mexican border.  With the same history, geography, natural resources, ethnicity, North Korea lives in poverty whereas South Korea is one of the richest nations on earth. The only difference between North and South is the government.  The border splits Nogales in two, the town on the US side is healthier, wealthier, and better served than the town on the Mexican side.  All of which is well known and obvious, but no details are given.  What specifically makes the successful ones successful.
   One of the authors, Robinson, is a Harvard professor, the other ,Acemoglu, is an MIT professor.  I don't expect much of Harvard professors, but I am disappointed that an MIT faculty member would put his name to such an unsatisfactory piece of writing.

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