Why Nations Fail In this essay, I am reviewing a book entitled Why Nations Fail written by Daron Acemoglu, and James Robinson. The book was written in 2012, and the authors mention the ongoing Arab Spring as they were putting together their ideas in writing. This coincidence makes me wonder if these authors were also impacted by the information revolution or the information outburst as Nye (2013) often chooses to call. In fact, the authors did not mention the term ‘information revolution’ in the book; they simply state that Egyptians are on the street not because they are poor, as many scholars and political analysts suggest, but because power has resided in the hands of a few elites, and these elites have used political power to amass personal wealth at the expense of the bigger mass. But why the Egyptian revolution took place at this particular time, instead of a decade ago, for example? As far as I understand political theories, the answer lies behind globalization and information revolution which opened a new gate to information. That is, since billions of people around the globe are capable of reaching the internet (about 1.7 million according to Nye), many are able to read online news, or even watch them live as they are being broadcasted. Thus, it is possible to associate the Egyptian revolution or the Arab Spring to globalization and information revolution. Acemoglu et al, (2012) also indicate that Egypt’s ex-president, Hosni Mubarak gathered a huge amount of Egyptian wealth (about $70 billion), and this greediness might explain why a generation of the information revolution—one that does not tolerate unaccountability in public sectors—took its anger to the Tahrir Square. The central argument of the authors of the book is that nations become poor predominantly because their leaders are absolute, and thus are not willing to share power or develop an inclusive economic policy from which the mass would benefit. Before they present their argument in depth, the authors have first ruled out several hypothesis that many think are the root causes of poverty. One of these hypothesis that the authors have rejected is the geography hypothesis—people who live in tropic of Cancer and Capricorn are tend to be lazy due to the climate of these regions, and lazy people lack curiosity, and are tend to be led by dictators. The authors argue that geography hypothesis is insufficient because countries like Botswana, Singapore, and Malaysia have managed to prosper even if they all have tropical climate. The modern version of the climate hypothesis is rather, according to the authors, the effect that disease, particularly malaria, have on productivity. The book again refutes the claim stating that infant mortality or the prevalence of malaria cannot explain poverty in Africa or in tropical regions elsewhere; disease, as they argue, is rather caused by the inability of governments to follow right public health measures. There are numerous other hypothesis that the authors label as invalid. For example, even if the writers believe that some cultures favor institutional differences and economic inequalities, they are again opposed to the claim that the protestant reformation and the progressive protestant culture promotes business ownership, or encourages prosperity. In their arguments against this claim, the authors provide some list of rich nations (Singapore, Russia, Italy, France, and China) that have no connection to the protestant culture. One interesting analogy that the Acemoglu et al (2012) have used almost throughout the book is the case of Nogales, Arizona in the U.S. and Nogales, Sonora in Mexico. As the authors indicate, these two cities exhibit a number of similarities including race, culture, geography, but they are separated by fence that separates U.S. from Mexico. The people of Nogales Arizona are entitled to the economic institutions of the U.S., for instance, to attend free school, to obtain business licenses without going through much bureaucracy, and to political rights: to bring their leaders to power or to vote them out if they misbehave; and politicians here render fundamental services to the citizens. Living on the other side of the fence, the people of Nogales, Sonora have much limited opportunities, and thus live in a separate world molded by a different institution (Acemoglu et al, 2012). Here, when these authors state that ‘politicians provide basic services to the people of Nogales, Arizona’, it makes me think of the important role that state still plays in this age where many readings suggest that states’ role is being overtaken by non-state actors. In refuting a geography or climate hypothesis, the authors present a plausible argument by citing the fact that the two Nogales, North and South Korea, as well as East and West Germany (before 1989) exhibit or exhibited a totally different level of economic condition. Generally, the book argues that disparities in living standards between North and South America, between Europe and Africa cannot be adequately demonstrated by differences in geography, culture, disease or ignorance. There is a strong interaction between economic and political institutions. Nations fail, not because of their geographic location, or cultural belief, or not because they are able to craft an economic policy that will help them prosper, but because they support extractive political institutions that hamper economic progress. As Acemoglu et al (2013) argue, states that practice monopolization and absolutism discouraged entrepreneurship and investments, and were opposed to industrialization because their absolute power and the political position that they enjoy as few elites would be challenged if the general public become economically independent. The U.S. and British are prosperous because their people removed the few elites who controlled power, and replaced them with a political institution where political power is available for the general mass. For instance, in the first half of the 17th century patient rights were being granted to European settlers in the New World with no regard to the individuals’ economic or social status (Acemoglu et al, 2013). Moreover, in 1914 there were more than 27,000 banks in America for citizens to be able to obtain loan, and to peruse invention or to start business. During the same period, the authors revel, Mexico had only 42 banks, two of which monopolized about two-third of total banking assets. The book discusses a great deal of the English Revolution and how it laid a foundation for the Industrial Revolution that followed. It also emphasized the role of Magna Carta, the establishment of the English Parliament, and how it helped to put a limit on the kings’ political and economic power. But once again, the book’s theme has remained the same— while countries that have created inclusive economic institutions, and sharable political system prosper, those who established extractive economic institutions and exercise absolutism have remained to be backwards. In the authors’ terms one common thing that poor nations (Nepal, Haiti, Afghanistan, and sub-Saharan Africa) share despite their location is absolute leaders and extractive economic systems. The authors further argue that not every nation benefited from the industrial revolution of the1688 for different reasons. Acemoglu et al (2012), argue, some groups have intentionally kept their people in poverty to ensure that their grip on power remains unshaken, i.e., improving the lives of others might mean distributing their political power, or even losing their political and economic privileges that absolutism grants them. Examples of these case include the Communist Party of North Korea, and sugar planters of the colonial Barbados (Acemoglu et al, 2012). Others, such as the Soviet Union, established extractive institutions to further their political agenda of the Cold War—the Soviet Union was able to attain sustainable economic growth in 1960’s and 70’s by transitioning from agriculture to industry, but the result was short-lived because a few elites controlled the economy, and they were using the gain to intensify their completion with the West. At the same time, England’s industrial revolution played a significant role in shaping the economies of those countries who were ready to adopt and follow the path of industrialization—North America, Western Europe, as well as Australia and New Zealand. But during the same period, absolutism that resembles the one that exists in Eastern Europe and Africa, was hindering industrialization in many parts of Asia. According to these authors, China and India were unable to make use of commercial and industrial opportunities while Western Europe was accelerating economic growth. The reason, for instance, in China, was the unchallenged absolute rule of the emperors that did not allow any other institutional path to development unlike the Tokugawa rule in Japan who had only weak control over the influential feudal domains, and thus remained vulnerable to change. Nevertheless, one should note that in today’s China, though absolute monarchy is no more the case, the country is known for its over-sized state monopolies, but still has managed to keep a higher growth rate. Thus, despite, the authors propose that concentration of political power and economy in the hands of the central authorities is a hindrance to development, the proposition is not holding true in China’s case. The book also states how absolute the sultan in the Ottoman Empire was when it was ruling over big portions of Balkans, and most of the rest of Turkey, Middle East and North Africa including Egypt. After Egypt gained its full independence from the British in 1922, the nation has fallen under different dictators with the recent one being the Hosni Mubarak family. According to the book, Mubarak family handled Egypt in a similar manner as the Ottomans did. Furthermore, when European colonization ended in Africa mainly in the 1960’s, extractive colonial institutions were continued to be carried out by the independent elite. These facts should lead to an important question: if Egyptian dictators, for example, Mubarak, followed the Ottoman’s economic and political legacy, and if post-independence African leaders simply strengthen the already created extractive economic system and absolute political rule, doesn’t it make sense to blame under development on colonization? In fact, it might be over generalization to entirely attribute poverty to colonial economic exploitation and colonial political policies, but it is still possible to associate colonial control to sluggish economic growth in colonized countries.