A Critique of Why Nations Fail by Acemoglu and Robinson

In a global economy surrounded by turbulence and instability, Daron Acemoglu and James Robinson attempt to tackle the conundrum of why certain countries live in a permanent state of poverty while others prosper in their novel ‘Why Nations Fail: The Origins of Power, Prosperity, and Poverty.’ Through a comparison Geoffrey Garrett’s ‘It’s the Politics’ and Atin Basuchoudhary ‘Daron Acemoglu and James A. Robinson: Why nations fail: the origins of power, prosperity, and poverty,’ this critical writing piece aims to examine the critiques made by the reviewing authors on the major strengths, weaknesses and contributions of Acemoglu and Robinsons novel.

Geoffrey Garrett, a reviewer based at the University of Sydney Business School provided an insightful and provocative review of ‘Why Nations Fail.’ He begins by acknowledging the strength of Acemoglu and Robinsons model by recognizing the similarities and links to prior academic literature from Max Weber's and his notion of cultural work ethic and Adam Smith's free-market principles to determine that the theoretical background provides substance and research integrity to their model.

Garrett continues on to provide a succinct analysis of the weaknesses found within the text by questioning the scientific reliability and validity of the effects caused by a country's institutional characteristics in which he states that “The authors can't scientifically test their bold and sweeping thesis because once can’t experiment on world history”. He further critiques their model by questioning their ability to look at the bigger picture in regards to environmental factors which don't play an as visible role in the creation of economic growth as the institutional characteristics ascribed by the authors. Through the examination of Mexico Garrett describes the issues surrounding the Mexican economy having been greatly affected by poor water supply resulting in large numbers of perishing crops over the years and rampant diseases which have significantly contributed to the stagnant economic growth of the country.

The final weakness Garret points out if the lack of continuity between the economic development of states that their ability to fit into the ascribed model in the current world economy. This critique is epitomized through the example of Greece, in which the majority of their economic problems, contrary to their model, have developed out of too much inclusive economic and political institutions.

While the second review by Atin Basuchoudhary, who agrees that the fundamental model of ‘Why Nations Fail’ was built upon the foundations of inclusive and extractive characteristics of a country's political and economic institutions. This article focused on the aspect of ‘differential institutional drift’, and how historical shocks affected the trajectory global economic growth. In comparison to Garrett’s review, Basuchoudhary focuses on the weakness over a mixture of strengths and weaknesses and seen in the Garrett review.

Both reviews make reference to the ‘Glorious Revolution in England in 1966’ as the event which sparked inclusive economic and political institutions. Basuchoudhary makes the link that this event also caused ‘institutional divergence’ by referencing the Black Death that caused a magnitude of labour shortages across both Eastern and Western European countries but it was how these countries responded that determined their economic growth.

Basuchoudhary finds the largest weakness of the model, similarly to Garrett but focused on a different example to be its inability to incorporate the bigger picture into their model. Such as the development in Africa, which has similarly circumstanced to England with labour shortages but didn't lead to the same development of inclusive institutions.

Garrett adds an interesting contribution on the development and future of China in relation to the trajectory it could potentially take according to the interactive/extractive institutions model, that the idea of China's economy will fail due to the inherent idea that extractive institutions ultimately fail, but he acknowledges that if their economy where to fall, it would convince academics who may be more skeptical about the validity of the model.

In conclusion, Garrett and Basuchoudhary provide stimulating and complementary reviews on the strengths, weaknesses and contributions of Daron Acemoglu and James Robinson ‘Why Nations Fail: The Origins of Power, Prosperity, and Poverty.’ While the review showcase two completely different interpretations of the model presented in ‘Why Nations Fail’ they both agree that the weaknesses outweigh the strengths shown by the reviews consensus on the need for the model to acknowledge the ‘bigger picture,’ but that it is still a model worthy of discussion.