Prosperity, power and poverty: why some countries do better than others.

Summary Why are some countries rich and others poor? Is it due to culture, climate, geography? Or is it the result of the ignorance of political leaders? Acemoglu and Robinson show with numerous examples that these answers do not hold water. History and economic analysis suggest a different explanation: it is the presence or absence of certain political and economic institutions that ensure or impede progress toward prosperity. From "extractive" institutions - protecting the interests of a powerful elite at the expense of the common good - to "inclusive" institutions - which set limits on the influence of the powerful, eliminate discrimination and promote innovation - the path is strewn with obstacles. Acemoglu and Robinson analyze them in detail, drawing on an impressive array of examples from the history of the Roman Empire, Mayan city-states, medieval Venice, the Soviet Union, Latin America, Africa, and the West. They thus develop a new synthesis of political economy of undeniable relevance to the major political and economic challenges of today.