Why Nations Fail: FROM THE WINNERS OF THE NOBEL PRIZE IN ECONOMICS: The Origins of Power, Prosperity and Poverty

In the West are the 'haves', while much of the rest of the world are the 'have-nots'. The extent of inequality today is unprecedented. Drawing on an extraordinary range of contemporary and historical examples, Why Nations Fail looks at the root of the problems facing some nations. Economists and scientists have offered useful insights into the reasons for certain aspects of poverty, such as Jeffrey Sachs (it's geography and the weather), and Jared Diamond (it's technology and species). But most theories ignore the incentives and institutions that populations need to invest and prosper: they need to know that if they work hard, they can make money and actually keep it - and the key to ensuring these incentives is sound institutions. Incentives and institutions are what separate the have and have-nots. Based on fifteen years of research, and stepping boldly into the territory of Ian Morris's Why the West Rules - For Now, Daron Acemoglu and James Robinson blend economics, politics, history and current affairs to provide a new, persuasive way of understanding wealth and poverty. And, perhaps most importantly, they provide a pragmatic basis for the hope that those mired in poverty can be placed on the path to prosperity.

About the Author :
Daron Acemoglu is the Killian Professor of Economics at MIT. He received the John Bates Clark Medal. James Robinson is a political scientist and economist and the Florence Professor of Government at Harvard University, and a world-renowned expert on Latin America and Africa. They are the authors of Economic Origins of Dictatorship and Democracy, which won numerous prizes.

Review :
You will have three reasons to love this book. It's about national income differences within the modern world, perhaps the biggest problem facing the world today. It's peppered with fascinating stories that will make you a spellbinder at cocktail parties - such as why Botswana is prospering and Sierra Leone isn't . And it's a great read. Like me, you may succumb to reading it in one go, and then you may come back to it again and again. For those who think that a nation's economic fate is determined by geography or culture, Daron Acemoglu and Jim Robinson have bad news. It's man-made institutions, not the lay of the land or the faith of our forefathers, that determine whether a country is rich or poor. Synthesizing brilliantly the work of theorists from Adam Smith to Douglass North with more recent empirical research by economic historians, Acemoglu and Robinson have produced a compelling and highly readable book. And their conclusion is a cheering one: the authoritarian "extractive" institutions like the one's that drive growth in China today are bound to run out of steam. Without the inclusive institutions that first evolved in the West, sustainable growth is impossible, because only a truly free society can foster genuine innovation and the creative destruction that is its corollary. This fascinating and readable book centers on the complex joint evolution of political and economic institutions, in good directions and bad. It strikes a delicate balance between the logic of political and economic behavior and the shifts in direction created by contingent historical events, large and small at 'critical junctures'. Acemoglu and Robinson provide an enormous range of historical examples to show how such shifts can tilt toward favorable institutions, progressive innovation and economic success or toward repressive institutions and eventual decay or stagnation. Somehow they can generate both excitement and reflection. It's the politics, stupid! That is Acemoglu and Robinson's simple yet compelling explanation for why so many countries fail to develop. From the absolutism of the Stuarts to the antebellum South, from Sierra Leone to Colombia, this magisterial work shows how powerful elites rig the rules to benefit themselves at the expense of the many. Charting a careful course between the pessimists and optimists, the authors demonstrate history and geography need not be destiny. But they also document how sensible economic ideas and policies often achieve little in the absence of fundamental political change. Two of the world's best and most erudite economists turn to the hardest issue of all: why are some nations poor and others rich? Written with a deep knowledge of economics and political history, this is perhaps the most powerful statement made to date that 'institutions matter.' A provocative, instructive, yet thoroughly enthralling book. Imagine sitting around a table listening to Jared Diamond, Joseph Schumpeter, and James Madison reflect on over two thousand years of political and economic history. Imagine that they weave their ideas into a coherent theoretical framework based on limiting extraction, promoting creative destruction, and creating strong political institutions that share power and you begin to see the contribution of this brilliant and engagingly written book. In this stunningly wide ranging book Acemoglu and Robinson ask a simple but vital question, why do some nations become rich and others remain poor? Their answer is also simple -- because some polities develop more inclusive political institutions. What is remarkable about the book is the crispness and clarity of the writing, the elegance of the argument, and the remarkable richness of historical detail. This book is a must read at a moment where governments right across the western world must come up with the political will to deal with a debt crisis of unusual proportions. Acemoglu and Robinson -- two of the world's leading experts on development -- explain why it is not geography, disease, or culture which explains why some nations are rich and some poor, but rather a matter of institutions and politics. This highly accessible book provides welcome insight to specialists and general readers alike.