Book Review: Why Nations Fail
When I set out to read Why Nations Fail, I was hoping to get an answer based on macroeconomic perspective on why nations fail; it took me 500 pages to find out why they actually do!
The concepts central to the entire book are simple and profound — the prosperity of countries are a direct result of how the institutions in the country are designed and that there is a lot of correlation between the nature of economy and politics. The countries that do well usually have inclusive institutions — characterized by pluralism, market based economy, well-represented political system with adequate feedback mechanism etc… On the other hand, the countries that have extractive institutions tend to not do well — those that feature closed-economy, authoritarian political regime, exploitative trade practices etc…And the “design” of these institutions are not deterministic, but a result of the symbiotic relationship of several events that take place, by the people who thwart opposing and offending forces. The authors also bust myths around common misconceptions around why nations fail, offer insights on why aids don’t work, why parachuting magic-bullet policy recommendations fail and why macro-economics are but a downstream consideration of larger concepts.
This the authors substantiate by taking us through 100s, sometimes 1000s of years of history on how some of the modern civilizations came about. Inclusive countries (ex — England, America, Australia, France and even countries like Botswana, Brazil etc…) at some point in history pushed for reforms and revolution towards inclusive practices, while countries like China, Russia, Eastern Europe, Nepal, Afghanistan are all characterized by extractive institutions.
So far so good. Problem is when they take almost 70–80% of the book going through pages in history, sometimes to grueling level of detail — which makes you (it made me) almost want to wait to get to the part of the book that we can better relate to — history of the more recent decades. Insightful as it was, I had to read hundreds of pages of events like Spanish colonialism, fall of the Mayan civilization, decline of the Ottoman empire, discovery of the new world, Black Death, Glorious Revolution, War of the Roses, Industrial Revolution, British Colonization, French Revolution, decline of the Roman Empire, African struggle through slavery, Brazilian uprising, Argentinian disaster and a plethora of significant historic events. I certainly don’t think that a broad concept like what the book sets out to explain can be explained without anecdotal historical information — but in hindsight, I think the authors could have used a lot less pages to say it.
If not for the number of pages I had to survive, I would rate this book much higher. I meant to write a much longer review on the things I was looking for in this book (why do the developed countries have issues, cause/ fix for crony capitalism as well as I wanted to get a more economics-based view) , what I see missing and so on — but may be the authors did not intend descending to that altitude — they kept it at a level of approximation where it is relevant to most of the world’s countries. If you decide not to read this book, read the slick summary at FP