Why Nations Fail by Daron Acemoglu and James Robinson – review

http://www.guardian.co.uk/books/2012/mar/11/why-nations-fail-acemoglu-robinson-review


Builders in Shenyang, China: party control will not permit a full ascent to prosperity. Photograph: AP

As the turbulence of global economic crisis starts to recede, the two fundamental features of the world economy in our times re-emerge. One is the gap between rich and poor countries. Two hundred years ago, there was no such gap, at least not on the scale we are used to today; nor, most probably, will there be one in 200 years' time. But the present reality is of astounding difference: the same people can live in abject poverty in one country, yet be prosperous once they move to another.

This book takes the graphic example of the twin towns of Nogales, one on the Mexican side of the border, the other on the American side: why does a border make such a difference? Self-evidently, this question matters, because unacceptable global inequality generates other brute facts: the psychologies of guilt and resentment; escalating pressures for migration; and the nightmare choices that face the world when some nations do not merely fall behind, but fall apart.

Scholars have struggled for decades to find a convincing answer. Often, the direction of search has been technocratic. In the 1960s, the dominant explanation was that poor countries lacked capital; by the 1980s, it was that they had poor economic policies.

The last decade has appeared to offer a new and potent clue: the ascent of China, which is the other fundamental feature of our times. China's growth is an economic phenomenon without precedent that has implications both for poverty and geopolitics. It has lifted millions out of penury and the country is projected soon to topple America from its position as the world's largest economy. The beacon offered by China has been widely interpreted, especially by African elites, as demonstrating the benefits of autocracy.