Why Nations Fail? Daron Acemoglu: The Role of Inclusive and Extractive Institutions on Shaping Technological Change, Innovation, and Prosperity

Abstract

Professor Daron Acemoglu argues in his book Why Nations Fail? The Origin of Power, Prosperity, and Poverty (2012), coauthored with James A. Robinson that the role played by inclusive and extractive institution is the main reason behind the huge gap in the standards of living between poor and rich nations. Such institutions emerge within the contextual political, economic, and social environment and they shape technological progress and innovation. By taking the United States as an example, Acemoglu argues that extractive institutions are enabling both economic and political inequality and contribute to the negative consequences of such types of inequality.