Why Nations Fail - Chapter 5 Review
Levisalles Amaury Georg-August-Universität
Sommer Semester 2012 Göttingen
WHY NATIONS FAIL
D. ACEMOGLU & J.A. ROBINSON
Seminar Paper
CHAPTER 5 "I'VE SEEN THE FUTURE, AND IT WORKS": GROWTH UNDER EXTRACTIVE INSTITUTIONS
What Stalin, King Shyaam, the Neolithic Revolution, and the Maya city-states all had in common and how this explains why China's current economic growth cannot last.
Summary
Resume of the Key Statements of the Chapter Description of the Original Researches used By The Authors Opposition to the Theories of Acemoglu and Robinson Personal Point of View Bibliography
3 6 9 12 15
2
Resume of the Key Statements of the Chapter
In this chapter, D. Acemoglu and J.A. Robinson explain how growth under extractive institutions is not sustainable in the long term and always leads to the collapse, in one way or another, of these institutions. The title of the chapter, "I've seen the future and it works", is a quotation from the autobiography of Lincoln Steffens (1931). He was then speaking about the communist model that he had discovered on a diplomatic mission to Russia. The title of the chapter is of course ironic since it is well known that the Soviet System broke down in 1991. In this chapter the authors tackle different aspects of Extractive Institutions and explain throughout many concrete examples as to why the multiple facets of these institutions lead to the end of them. Extractive political and economical institutions are "structured to extract resources from the many by the few" and "concentrate power in the hand of a few, who will then have incentives to maintain and develop these institutions" (page 430). Dictatorship is the best example of an extractive institution as in this case power is concentrated in the hands of very few, if not only the dictator himself. These types of institutions are mostly founded in authoritarianism and totalitarianism political systems (dictatorship being an authoritarianism type
Sommer Semester 2012 Göttingen
WHY NATIONS FAIL
D. ACEMOGLU & J.A. ROBINSON
Seminar Paper
CHAPTER 5 "I'VE SEEN THE FUTURE, AND IT WORKS": GROWTH UNDER EXTRACTIVE INSTITUTIONS
What Stalin, King Shyaam, the Neolithic Revolution, and the Maya city-states all had in common and how this explains why China's current economic growth cannot last.
Summary
Resume of the Key Statements of the Chapter Description of the Original Researches used By The Authors Opposition to the Theories of Acemoglu and Robinson Personal Point of View Bibliography
3 6 9 12 15
2
Resume of the Key Statements of the Chapter
In this chapter, D. Acemoglu and J.A. Robinson explain how growth under extractive institutions is not sustainable in the long term and always leads to the collapse, in one way or another, of these institutions. The title of the chapter, "I've seen the future and it works", is a quotation from the autobiography of Lincoln Steffens (1931). He was then speaking about the communist model that he had discovered on a diplomatic mission to Russia. The title of the chapter is of course ironic since it is well known that the Soviet System broke down in 1991. In this chapter the authors tackle different aspects of Extractive Institutions and explain throughout many concrete examples as to why the multiple facets of these institutions lead to the end of them. Extractive political and economical institutions are "structured to extract resources from the many by the few" and "concentrate power in the hand of a few, who will then have incentives to maintain and develop these institutions" (page 430). Dictatorship is the best example of an extractive institution as in this case power is concentrated in the hands of very few, if not only the dictator himself. These types of institutions are mostly founded in authoritarianism and totalitarianism political systems (dictatorship being an authoritarianism type
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