Why Nations Fail Why Nations Fail

Failure of nations is a historical issue that has plagued many nations
over the years. Many factors have contributed to this state of affairs.
However, a number of countries have escaped from the vicious cycle of
failure and poverty by dealing with the underlying factors that
contribute to failure. Most research over the years has focused on the
economic and political institutions. The economists focus on economic
institutions while political scientists focus on the political
institutions. Modern research and literature on the failure of nations
has, however, tried to link the two fields. This paper will review
available literature and give a critic of the literature.
Over the years, the argument that the quality of a leader, his policies
and ideologies notwithstanding, have determine the success or failure of
nations. Others argue that economic policies, cultures and values are
the determinants of the success or failure of nations. However, Acemoglu
and Robisnson (2012), argue that the real problems facing nations are
the political institutions which influence the economic institutions.
Thus, the politics and economics of a country go hand-in- hand.
Political institutions can be divided into inclusive and exclusive
institutions. Exclusive institutions are where a few individuals own the
means of productions and hence the wealth of the society. The rest of
the population lives under poverty and control of the rich owners of
production. In such societies, the rich exploit the rest of the
population and exclude the rest from accessing the means of production.
Wealth is controlled by a few individuals. Such societies are poor as
the majority of the population lives in poverty (Acemoglu & Robinson,
2012). Such societies are found in Africa, Central America and South
Inclusive institutions, on the other hand, majority of the population
are a part of the governance system. In such societies, exploitation is
minimal or non-existent. Such institutions encourage innovation and
continuous development. This leads to continuous growth and development.
It can also be noted that societies that have developed from poor to
middle income or rich have transformed their societies over time from
exclusive to inclusive, such as the Chinese.
However, as much as inclusive institutions promote growth of nations
some institutions need to be exclusive to the central governments so as
to benefit the majority of the populations. Such institutions include
the Judiciary, health and education. This facilitates access to everyone
regardless of their socio-economic status, and it also promotes quality
assurance and control.
History has, however, shown that the success of societies is not
entirely dependent on inclusiveness or exclusiveness. This bearing in
mind that society is unpredictable and historical events may alter the
path of development of nations. For example, the West is inclusive thus
the enormous strides in development. However, the West was hit by an
economic crisis in the recent past while nations such as China which
were originally exclusive, keep growing. Therefore, this shows that
unpredictable events of history may alter that development path of
entire societies.
The argument also focuses on the need for societies to be alive to
changes and continually transform their political institutions so as to
move, from exclusive to inclusive societies. The Mayan developed when
the exclusive institutions failed, and the society transformed into
inclusive institutions, which put them on the development path
(Ancemoglu & Robinson, 2012).
In exclusive societies, corruption and exploitation are rampant. Such
societies have imperialist institutions that closely control the
majority of society. Such imperialist institutions include strong
armies, close control of government by the executive and firm dictators
who reign with iron fists. For example, the Arab spring was triggered by
imperialist institutions and dictators who ruled with close control of
government policies. In such societies, the government is ever present,
and all voices of discontent are quickly subdued. Most demonstrators in
the Tahrir square, in Egypt, were quoted saying that the government was
very corrupt, and the army was imperialist and dictatorial.
Exclusive societies usually collapse to revolutions and popular
uprisings such as the Arab spring and French revolutions. Some societies
have, however, escaped this route by voluntarily transforming their
institutions from exclusive to inclusive. For example, South Korea’s
prosperity is closely linked to initial dictatorship, but the government
gradually transformed its institutions from exclusive to inclusive and,
this rescued the society from imminent collapse. Things are totally
different and oposite in North korea. Some societies, however, have
features of inclusive governments, but some sections of the society live
in poverty due to other factors. For example, Italy is an inclusive
society but the north is more successful than the south. This is due to
the close control of social structures in the south by the country’s
strong mafia which has caused many social institutions to collapse.
In inclusive societies, democracy is very strong within the government.
There are laws that guide the political institutions so as to make them
answerable to the greater society. In such societies, irresponsible
politicians are voted out of office in democratic elections and, this
keeps the political class on its toes as the ability to rule is at the
mercy of voters (Acemoglu & Robinson, 2012). In such societies,
businesses and other economic institutions are prosperous because the
political class provides a favourable environment for investors to work
effectively. This is done through incentives which attract investors and
other players to the society. The government are responsive to the needs
of society and this makes societies become prosperous, and government
actions and policies are guided by the needs of the people.
Based, in history it is true that society is shaped by the political,
economic and institutions operating in it. The political arm is the most
significant factor. This is because the political institutions are
shaped by ideologies of political leaders and these ideologies influence
the forces of that the economy and policies. Thus, political
institutions with liberal approaches to economic policies enable
societies to grow. Such institutions promote openness and this reduces
corruption while allowing the free market trade.
Acemoglu and Robinson (2012), also note that democracy cannot be imposed
on a society from external sources. Democracy is necessary in
determining the most suitable kind of political leadership with proper
ideologies and sound economic policies. However, democracy has been
noted to succeed if it comes from within society and not imposed from
external sources. For example, the Egyptian kind of democracy in the
post-Mubarak era has been observed to fail because the Western powers
are deemed to have imposed their own kind of democracy on the people.
This has led to democracy that is not in tune with the social-political
realities of the society. Thus, as much as the political freedoms are
important for economic gains, the forms of freedoms must be relevant to
the society.
China has been cited as an economic giant that has emerged under tight
political control of the social institutions. It has been argued that
dictatorship does not succeed for a long time under sound exclusive
political control. Therefore, China is said to be on the way to economic
failure in the long run. However, it should not be ignored that, despite
the close social controls, China has open economic policies which are
suitable for sustained economic development. It is also apparent that,
China was previously communist, and it is until recently that the
Chinese embraced capitalism. Thus, the need to accumulate wealth by the
majority of people may be more important than democracy and political
freedoms. Also, China may eventually follow the path of South Korea, and
this will save it from economic failure in the long run.
Economic growth is also influenced by innovation and creativity. This is
because the world is continually changing especially with regard to
technology. Thus, countries that are technologically innovative are more
prosperous as the end products fetch high incomes across the globe.
Therefore, countries must allow the citizenry to be innovative and adapt
to change to increase efficiency in production. It must be, however,
noted that innovation comes with political freedoms, which must be
guaranteed by the political institutions of society.
Political agents are also important in the development. The agents must
be willing to incorporate the majority of the people in actions for
political goodwill in order to push through with sound policies. This
means that the political agencies must be, in tune with the majority of
the people to foster a united front. For example, Zimbabweans removed
white settlers from their country so that the poor people would have
access to land. However, what started as a noble idea only ended up
benefiting political agents of the ruling class and the majority of
Zimbabweans remain landless. This shows that political agents are also
significant in the implementation of socio-economic policies.
On the other hand, the writers argue that only societies with inclusive
policies end up being successful. However, based on current economic
trends in the west, with the recent economic meltdown, this may not
necessarily be true. The western democracies have served as examples of
successes of inclusive forms of government. This, however, can be
challenged with the economic meltdown and the rise of China which is
exclusive. Thus, it occurs that inclusive governments eventually reach a
peak and stagnate of start to decline, and this may eventually lead to
exclusiveness. Inclusiveness may eventually lead to wide differences
between the rich and poor as the rich continue to expand their wealth
and thus start to have political influence, which leads to
exclusiveness. Thus, the wealthy have a stronger voice than the poor,
and this can be viewed as a new form of dictatorship.
Acemoglu and Robinson do not focus on factors external to a nation. They
only focus on competition and reforms from within the country only. It
should be noted as much as the environment within the country is
necessary, globalization has led to international competition and only
those countries that compete favourably at international markets are
able to bring wealth to their own people. Therefore, the focus should
also be on external factors and internal political relations. For
example, despite its rich oil wealth, Iraq faces many economic
challenges due to international trade bans on it.
The writers have made valid arguments that clearly show the link between
political leadership and economic growth. These are issues that have
affected many societies especially in developing countries that do not
have strong democratic institutions. The arguments are well illustrated
and this supports that logical presentation of points by the writers.
Their methodology mainly focuses on linking historical events with
theoretical perspectives to support their points. The arguments are also
consistent and the ideas flow from the main points to the less important
ones. The main points are also well supported by subsequent arguments.
The major strength of the book is the support of arguments using
historical events. However, the authors put too much focus on internal
factors and almost ignore external forces of development.
In conclusion, the political institutions are essential to the economic
development of a country as they influence policies that are important
economically. Thus, countries that have made economic gains had to
change their political institutions. The governments should also involve
the citizenry in coming up with suitable policies that focus on issues
within society. This ensures that governments remain responsive to
societal needs and the society can therefore improve because government
policies are in line with the actual needs of the people.
Acemoglu, D and Robinson, J., (2012). Why Nations fail. New York: Random

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