"
Why Nations Fail" is "brilliant in its simplicity" we read on the cover, and in a way this is a good description of this excellent book, even if this 500-page book is more complex and richer than the quote might suggest.
Acemoglu is Professor of Economics at MIT, and James Robinson a Political Scientist and Economist at Harvard University.
Their core message is simple: 'inclusive institutions' such as democracy and citizen participation in decision-making lead to prosperity, whereas 'extractive institutions' in which the elites rule with autocracy, poverty is the eventual result. They give good examples of situations where culture is identical, but the political organisation of the country leads to different outcomes. One is the town of Nogales, divided by the border between Mexico and the United States, which results in a totally different level of prosperity for its inhabitants on both sides. Another example is the divide between North-Korea and South-Korea, in which the former is led with dictatorial rule, and where, despite the ruler's rhetoric, only the elites experience prosperity, and in which the former, thanks to its democratic institutions, have economic growth, creative enterpreneurship, global trade and prosperity.
Yet other factors play a role too, such as centralised government which can ensure longer term stability, rule of law and other aspects of organising society. In fact, you need both to be really prosperous, as history shows. He gives examples of highly succesful increases in production when centralised government takes over (as with the Bushong in pre-colonial Congo or with the early Soviet-Union), but this is doomed to fail in the context of an 'extractive economy', where the wealth is distributed very unequally.
They counter the wrong assumption that economic wealth is the result of cultural, geographic, or meterological differences.
Both authors give a myriad of examples throughout history - the importance of the Enlightenment and the industrial revolution - and geographically, with a lot of attention to the United Kingdom, but also covering the entire globe, with attention to South-America, the Middle-East, Africa and Asia.
Another aspect is the need for 'creative destruction', a term once coined by Joseph Shumpeter, in order to make change possible. You need different voices, different perspectives, and especially new and disruptive technologies to change the current state.
What both authors write does not come as a real surprise. We all know that people are better of in democracies than in dicatorships. We also see that wealth is better distributed in democracies than in autocratic states. The value of the book is that they provide the framework for it, and with lots of evidence. Now that the patterns are clear, the only depressing conclusion is - of course - that there is no clear recipe to move from an 'extractive' situation, where the elite oppress the masses, and possess all the wealth of the country, to an 'inclusive' state, where democracy and rule-of-law reign.
The book is not really an eye-opener, but it substantiates what many already assumed. We can only with that its content can be read more widely across the world, and do its tiny part in educating people to fight autocratic and theocratic regimes, allowing people to choose their own destiny.