A while ago I became aware of the idea there was a mystery in economics. This is the way I remember it: For a long time technology would improve but this would just lead to a change in population so that the standard of living remained pretty much the same over millennium. But then, during the industrial revolution something changed and technological changes began to lead to sharp rises in living standards. All the explanations for why Briton in the 18th and 19th century was the turning point, rather than any other place of time in history, seemed unsatisfactory to me. With this intellectual problem came a practical one. For not every place that came in contact with industrialized societies experienced the standard of living gain.
Why Nations Fail: The Origins of Power, Prosperity, and Poverty by Daron Acemoglu and James A. Robinson opened a whole new and promising view point on this for me. Looking at both political and economic processes as they interact with one another, the authors show how societal institutions can self perpetuate in ways that tend either towards wealth or towards poverty. Including how the problems of hanging onto power can pit a ruler’s own economic interests against the general economic interests of society. It looks at who well intentioned efforts to help poor nations can be ineffective or even backfire. It looks at the importance of empowering broad and diverse coalitions and developing stable inclusive political and economic institutions to sustainable economic growth.
The book is written in understandable and engaging style aimed at a lay audience. There are historical and contemporary stories that can tug at your heartstrings for call for cheering. It is a long book; this is a complicated theory and the authors go through lots of different examples to explain the subtleties. There is no quick fix proposed as the problem is not simplified into a one dimensional issue. I would still recommend that every responsible citizen read this book and give consideration to its ideas.
*The review was based on the audio version read by Dan Woren