Posts Tagged Politics
Brief Review on Why Nations Fail (2012)
Posted by yudo in Book Review, Economics, History on February 10, 2013
1. Now, let’s talk about why nations fail #WNF
2. In March 2012, Daron Acemoglu (MIT) and James Robinson (Harvard) launched their book that attempted to answer, why some nations rich while others poor? #WNF
3. Do cultural or geographic factors determine the economic development? #WNF
4. To answer this question, they drew a long historical line, from the Roman Empire, Mayan, Venice, Soviet Union, to Europe and US #WNF
5. Why Egypt is so much poorer than the US?
6. Some factors may explain: corruption, oppression, and bad education under Mubarak regime #WNF
7. But the determinant factor in Egypt was the exclusive political institution #WNF
8. The political power was monopolized by a narrow elite #WNF
9. So it is not the geographic or cultural factors that make a nation poor #WNF
10. US and UK were rich because political rights were distributed more broadly #WNF
11. Elites were overthrown, government was accountable, and people could seize economic opportunities #WNF
12. Innovation were encouraged, patents and property rights were protected by government #WNF
13. Other example, Nogales in Arizona (US) and Nogales in Sonora (Mexico), only divided by a fence #WNF
14. People in Nogales Arizona are relatively wealthy, children go to school, have access to health care #WNF
15. Political system is inclusive, democracy is implemented #WNF
16. In Nogales Sonora, people are relatively poor, low educational level, high infant mortality #WNF
17. Democracy is a rare evident in this area# WNF
18. So, these two Nogales have similar culture and geography, but different prosperity #WNF
19. Similar case in South Korea and North Korea #WNF
20. Again, It is inclusive political institution that matters #WNF
21. Inclusive institutions provide basic service to public, people can vote easily #WNF
22. My concern, not everybody is ready for open institutions #WNF
23. One good aspect of open institution is its emphasis on innovation and patent #WNF
24. Patents were blooming in the US in the 19th century #WNF
25. “If you were poor with a good idea, you could take out a patent, which was cheap”#WNF
26. Then you can start your own business, through the loan from investor #WNF
27. Having an idea-starting a firm-and getting a loan #WNF
28. It is like Thomas Edison who applied science to create profitable businesses #WNF
29. Fair competition among investors should be maintained to keep low interest rates #WNF
30. Inclusive economic institutions create incentives for people #WNF
31. Incentives to become educated, to save and to invest, to innovate #WNF
32. Political institutions determines the type of economic institutions, and how they work #WNF
33. Remember my sociology professor, institutions shape our daily life #WNF
34. Open institutions stimulate the creation of entrepreneurs and good governance #WNF
35. A funny quote from Montesquieu, people in tropical climate tend to be lazy, don’t work hard, so they are poor #WNF
36. But Acemoglu and Robinson argue that it is because the diseases in tropical countries are more severe than in any other parts of the world #WNF
37. And again, it is because the failure of government to provide such a sufficient health care system #WNF
38. How about China? under Deng Xiaoping they transformed their political and economic institutions to be more open #WNF
39. Again, inclusive political institutions tend to support inclusive economic institutions #WNF
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