Why Nations Fail

51BQRGThzILThe clues were on the cover, “Truly awesome… brilliant in it’s simplicity and power.” – Steven Levitt, coauthor of Freakonomics, uh oh. Doubt i’m on my own in finding the premise of works like Freakonomics inherently dubious. If their conclusion were the brilliant insights they claim, they’d be famous economists, not authors and chatshow guests… which is all by-the-by, as my real point is that ‘simplicity’ and socio-economic theory really don’t feel like particularly comfortable bed fellows! Societies are inherently complex, just the interactions between all the (to some degree) independent actors should be a clue that it’s not all going to boil down to some simple rule, universally applied. Comparisons between societies would surely represent a whole additional level of complexity. And yet…

The simple message of this book can be boiled down to: inclusive institutions good; extractive institutions bad. Well, theres a shock.

So, you might ask, what’s wrong with that? As a piece of the puzzle, as a part of an explanation for differences between nations, absolutely nothing. The problem comes when it is used Reductio ad absurdum as the ‘maxim’ to explain the development of human societies in total. Everything from early tribal success, to differences between the distribution of wealth on the continents. Ridiculous.

Jared Diamond, who addresses far more of the complexity in Guns, Germs, and Steel, and Collapse, quite rightly take Acemoglo & Robinson to task in his review and follow up to their response.

It seems to me that Acemoglo & Robinson could have written a far more useful book of case studies, much like Diamond’s Collapse, and left out all the grand claims to explanatory power for their theory throughout the human history. That they didn’t is interesting in it’s own way. Published now the result comes across as an exultation of the western system of democratic capitalism, a hymn to enlightened imperialism, “adopt our system! share in our fabulous wealth!” Maybe it all would have sounded a lot less tin-eared if it had been published pre-2007…