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Book review

Book review: Why Nations Fail

Why Nations Fail by Daron Acemoglu is to answer the question: Why are some nations wealthy and some nations poor.

The same effort in Guns, Germs and Steel, Jarrad Diamond proposed a geographic hypothesis. He made an argument that hinges around geographic luck factors – world inequality is rooted from climate or diseases.

Why Nations Fail arrives at a different answer: prosperity of nations is because of their inclusive economic institutions. Extractive economies don’t create incentives needed for people to save, invest, and innovate.

The research method relies on case studies to prove their hypothesis. However, limited case numbers are hardly to be convincing to me of their opinions from scientific and statistic perspective. There are many variables affecting nation wealth: geography, culture, history, economic institutions and many more. I think dominant variables, if exist, to relate to prosperity, could evolve over time and can be different at and dependent on situations.