Why Nations Fail: The Origins of Power, Prosperity, and Poverty by economists Daron Acemoglu and James A. Robinson offers an institutional interpretation of economic growth and development. Societies are successful, the authors argue, when their political and economic institutions are inclusive and adaptive. Societies become repressive and ossified, on the other hand, when their institutions are ”extractive”–that is, when a small, parasitic elite embeds itself in a privileged position and siphons off wealth from everyone else.
Jeffrey Sachs, on the other hand, offers a far more negative review.
Acemoglu and Robinson’s response to Sachs’s review, posted yesterday, is devastating. They write:
Sachs charges that we are “simplistic” and our argument “contains a number of conceptual shortcomings”. But in each case, these are either just stated (and are wrong) or he is criticizing something we haven’t said. The Sachs strategy seems to be to throw a lot of mud, hoping that some of it would stick — did we say that we didn’t think it was quite thoughtful?