David Rubenstein's Reviews > Why Nations Fail: The Origins of Power, Prosperity, and Poverty

This is an excellent book about the reasons why some nations are prosperous, while others are steeped in poverty. The authors contend that some nations have "inclusive" economic and political policies. These policies give a political voice to a large segment of the population, rather than only to a small elite. As a result, a set of checks and balances tends toward a positive feedback, sometimes called a "virtuous cycle". This virtuous cycle helps to accelerate the tendencies toward inclusiveness, and to suppress occasional lapses toward power-grabbing.

The other side of the coin are nations with "extractive" economic and political policies. A single person, or a small elite, finds it in their personal interests to grab power and extract as many of the nation's resources for their personal gain. They reject technological innovation, and try their best to maintain the status quo. These nations may temporarily improve their economical conditions, but in the long run their improvements cannot be sustained. Interestingly, the authors claim that China, despite economic improvements in recent decades, is going to be a short-lived phenomenon. At its roots, the political system is still extractive, because it does not allow dissension, does not protect private property, and does not extend the rule of law to everyone.

The authors go into considerable detail, explaining why Western Europe, especially Great Britain, became more economically successful than Eastern Europe. They extend their understanding to North vs. South America. They describe the histories of many other countries as well, to understand why inclusive or extractive policies have helped or hindered progress.

The book tends to be rather repetitive, sometimes too repetitive for my taste. Also, sometimes the sentence constructions are a bit awkward. Nevertheless, the book gives some fascinating insights into political science, and why nations become progressive, or tend toward failure.