The book "Why some countries are rich, and others are poor. The Origin of Power, Prosperity and Poverty, "Daron Ajemoglu and James Robinson. Books on economics

The book "Why Some Countries Are Rich and Others Poor" is a recognized best seller. It is read all over the world, the teachers advise it to their students. What are the authors of the book telling about, and why does this information evoke such a positive response? Read all about this in the article below.

Short introduction

The book "Why some countries are rich, and others are poor. The origin of power, prosperity and poverty "was written in the distant 2012. The authors were two neoinstitutionalists from America - D. Ajemoglu and J. Robinson. The work is an analysis and a complex of all previous studies. The book is based on a new institutional theory, from which the authors offer the reader new versions of the development of states in the economic and social plans. In detail the book examines the factors on which economic growth depends, the possibility of accumulating money. Also, a website was created that revealed the meaning of the book in more detail. It was completely English-speaking, it existed until 2014.

Basic Ideas

Ajemoglu and Robinson in their book prove that many researchers were wrong. They assumed that the development of the country's economy directly depends on its geographical location, climate, ethnic component, natural resources and even religion and culture. We must admit that all these factors are guided by these factors. However, the authors of the work "Why Some Countries Are Rich and Others Poor" completely deny such statements. They reinforce their thoughts with real examples. An example of paired societies is considered, which go in completely different ways of development, while they have almost identical geographic and national characteristics.

What, then, does the economic development of the state depend on, according to the authors of the book? Daron Ajemoglu claims that it is based on the nature of the country's political and economic institutions. The book provides a deep analysis of the development of economies of different countries. Various political institutions are examined and compared in different epochs. The following countries came under careful analysis of experts: Australia, Botswana, France, Mexico, USA, Columbia, South Korea, China, USSR, Uzbekistan, Russian Empire, Turkey, British Empire, Maya civilization, Roman Empire.

Two models of economic institutions

The book "Why Some Countries Are Rich and Others Poor" offers readers two main models of economic institutions: extractive and inclusive.

The extractive model assumes that a small number of people receive all the benefits from the country. This group of electors isolates the remaining citizens from the possibility of making a profit in economic relations. This model is characterized by the alienation of property or income in favor of a narrow group of people. It is possible to build such a model exclusively at an extractive political institute that will protect and protect a privileged group.

An inclusive model allows participation in the economic relations of a large part of the population. In such a state, the inviolability of private property is guaranteed at the legislative level. Of course, such models can only be built on the basis of inclusive political institutions.

Which model is more profitable?

James Robinson and his colleague come to the conclusion that both models of development are effective, but in each of them the pace and dynamics of development are different. Economic growth is indeed possible with the extractive model, but it will be short-lived, and as a result of well-being will achieve unity. Inclusive models develop more quickly and qualitatively. This is natural, because a state in which almost every member of it is engaged in legitimate gain of profit, achieves economic prosperity much faster. In such a country there will be no place for poverty. It is believed that inclusive models allow states to better transfer external and internal crisis situations, while extractive models can only exacerbate the situation.

This is also quite logical, because citizens who have a decent standard of living are more loyal to the government. They are ready and can move the crisis, knowing that in the future everything will return to normal. In the extractive model, citizens will consider that everything becomes worse, and there is no way out of poverty. This can provoke rallies and discontent.

Long-term perspective

James Robinson believes that, despite the possibility of economic development of the extractive model, in the long run it is inefficient due to a number of factors. When people can not benefit from their studies or are forced to give up most of the state, the incentive to work is lost. Instead, negative incentives are formed that induce some to commit crimes. In the extractive model, narrow groups of people inhibit the development of technology and science, since the introduction of new technologies can shake their power and transfer the reins of government to the hands of other groups. Modernization, which is carried out under the conditions of the extractive model, is completely ineffective, as it has a catching-up character. An example is the resistance of the landed aristocracy of advancing industrialization. In an inclusive model, the landed aristocracy could try to prevent the process of industrialization, but this would not have succeeded because of the inability to overcome strong political institutions.

Example of the USSR

The example of this country considers economic growth in the extractive model. Heavy industry developed exclusively at the expense of the resources of the village. At the same time, the peasant economy was very unorganized and inefficient. In addition, the level of technological progress was much lower than in some European countries.

By 1970, the resources of the village had been redirected to industry. However, this put the Soviet system at a dead end: the forced labor system no longer worked, the elite resisted change, and economic incentives were completely absent. To get out of this circle, the Soviet government had to abandon the extractive management model, but this would entail the fall of power. As a result, all this led to the collapse of the USSR.

Is it possible to move?

Books on economics argue that the transition from an extractive to an inclusive management model is possible. Moreover, it happened many times in history. It is quite difficult to classify a country strictly according to a particular model. Many countries are mixed models. The modern world is full of states that are close to one of the described models, but do not have its "pure" characteristics. It is important to note that development on an extractive or inclusive path is not predetermined by historical factors.

The authors of the book "Why Some Countries Are Rich and Others Poor" cite the "Glorious Revolution" as an example. It was the starting point for the UK's transition to an inclusive development model.

However, history is also known for reverse transitions. For example, the Venetian Republic. The government concentrated all power in its hands, blocking other citizens access to the country's economic resources. This led to many consequences, which eventually led to the decline of the country.

Paths of transition

Political and economic institutions can be transformed. But the process itself depends on many factors. An important role is played by the degree of extractivity. The stronger the narrow group of people, the more power and opportunities are concentrated in her hands, the less chance of moving to an inclusive model. Equally important is the existence of separate groups of people (preferably at the legislative level), which could at least nominally resist the elite. Practical results would not have been achieved immediately, but the population would have felt that they could and should be resisted. If the opportunity of transition was opened, the people did not fail to use it. The third important factor is the creation of a large group, united by common interests - a coalition that would represent the most diverse segments of the population.

After reading books on economics, one can understand that even if such attempts to change the system are undertaken, they often lead to the same result. The group, which fights against the elite, subsequently becomes it. This is a rather sad tendency, which nevertheless takes place in a number of states.

The book ends with the fact that the authors offer alternative development forecasts based on the proposed models. In their view, states that do not have a stable political system (Haiti, Afghanistan) will not be able to achieve significant economic development. Countries that have achieved some political autonomy can claim weak and unstable economic development (Tanzania, Ethiopia, Burundi).

Reviews

Critics expressed a positive attitude towards the book. The depth of the analysis, the arguments and the specific examples were emphasized. A small number of negative reviews were based on the fact that too little attention was paid to geographical and ethnic factors. It was also noted that the authors practically did not mention the factor of influence on the development of states of such international organizations as the World Bank or the IMF.