Arnold Kling  

Review of Why Nations Fail

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The book is by Daron Acemoglu and James Robinson. The review is by Paul Collier. Collier writes,


Their argument is that the modern level of prosperity rests upon political foundations. Proximately, prosperity is generated by investment and innovation, but these are acts of faith: investors and innovators must have credible reasons to think that, if successful, they will not be plundered by the powerful.

For the polity to provide such reassurance, two conditions have to hold: power has to be centralised and the institutions of power have to be inclusive...

it is only in the interest of the elite to cede power to inclusive institutions if confronted by something even worse, namely the prospect of revolution. The foundations of prosperity are political struggle against privilege.

Read the entire review. I have not read the book. I have read Violence and Social Orders, by North, Weingast, and Wallis, which seems to offer a roughly similar thesis.

Pointer from Mark Thoma.


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COMMENTS (6 to date)
Daniel Klein writes:

I wonder how much the two books you mention connect to Adam Smith. People recognize that WN put forth the idea that prosperity tends to go with natural liberty. But they do not sufficiently recognize the emphasis Smith put on the security of one's stuff, that is, on one's confidence that the rules -- even if they be not so liberal -- will not change. IN WN and LJ there are perhaps all together 15-20 places where this point comes up, and sometimes in a quite emphatic way, and sometimes with elaboration of the incentives. Also, sometimes he contrasts different countries in this respect, always (I think) giving top honors to Britain.

Today the idea is associated with Robert Higgs. He calls it regime certainty (I think a better term is rules certainty).

Do either of the books cite Higgs?

[Link provided for WN, evidently Adam Smith's _Wealth of Nations._ But: What is LJ? That acronym or abbreviation is unfamiliar to our readers. Neither is it mentioned nor referenced in the blog post or in any comments. "LJ" could refer to any of several works--but probably is a reference to Smith's Lectures on Jurisprudence, Please explain for the benefit of our readers. I also suppose that our readers should not be required to read the whole of Smith's multi-volume WN or LJ just to search for the 15-20 references you suggest are there. A few supporting paragraph references, quotes, or links might help our readers connect.--Econlib Ed.]

R Richard Schweitzer writes:

A School of Enquiry seems to be developing along the lines opened up by Douglas North (who does cite Acemoglu's work).

As a precedent fo the work Arnold cites, one should become familiar with:

NBER Working Paper # 12795 (2006)

and

World Bank Policy Study # 4359 (2007)

by those same scholars.

At issue is the function of "Open Access" in the development of social orders; which Acemoglu's work (going back at least as far as those drafts I read in August of 2007)is now applying to the "survival" as it does to the development of the forms of social order qualifying as Nations.

R Richard Schweitzer writes:

A School of Enquiry seems to be opening up along the lines of the scholarship of Douglas North (who cites Acemoglu from time to time): and no, it does not connect with WN or other works out of the S.E. (Scottish Enlightenment).

To follow the trends of this School,there are precedent to the work cited by Arnold:

NBER Working Paper 12795 (2006)

and

World Bank Policy Study 4359 (2007)

by the same scholars.

Since as far back as the August of 2007 Drafts of his work I read, Acemoglu has been examining The concept of "open Access" (which those prior studies view as critical to the development of "advanced" social orders) as also critical to the survival of those social orders that comprise nations,

R Richard Schweitzer writes:

Sorry for the double post, but the site disappeared from my screen and so I thought I had to start over.

Gavin Kennedy writes:

Before we accept that Adam Smith related "the idea that prosperity tends to go with natural liberty" as being a strictly conditional relationship between the two, we should note that, in fact, he was critical of too strict a conditional relationship being implied to both 'prosperity' and 'natural liberty'.

In book IV, chapter 9, of Wealth Of Nations he specifically rejected, with hints of soberly mocking, such a necessary or sufficient relationship, then advanced by some of the French Physiocrats, whom he met in Paris in the company of Dr Quesnay in 1764-6:

"If a national could not proper without the enjoyment of perfect liberty and perfect justice, there is not in the world as notion which could ever have prospered'" (WN IV.ix.28: page 674).

Daniel Klein does not relate the two ideas strictly, but such a relationship may form later in the busy minds of readers.

R Richard Sc hweitzer writes:

There always seems to be a tendency to apply the structure of the social organization we "have" and know to define the requisites of successful structure and sustainability. Thus, we will get comments about Liberty, etc.

Much of the scholarship of Acemoglu, while recognizing the benefits of "freedoms" in the development and "prosperity" of social structures, is not constrained by those considerations when analyzing "survival."

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