“Why Nations Fail: The Origins of Power, Prosperity, and Poverty”

by Daron Acemoglu and James A. Robinson

In Why Nations Fail, Acemoglu and Robinson explore the reasons behind economic inequality across countries, arguing that political and economic institutions are the primary determinants of prosperity.

They make a case for inclusive institutions – those that distribute power broadly and encourage participation – as essential to economic growth.

Conversely, extractive institutions, where power is concentrated and wealth is extracted from the populace, hinder development.

By examining historical examples, the authors show how these institutional differences shape economic outcomes, proposing that institutional reform, not cultural or geographic factors, is key to fostering economic success.