Why Nations Fail: The Origins of Power, Prosperity, and Poverty

Why Nations Fail: The Origins of Power, Prosperity, and Poverty by Daron Acemoğlu
My rating: 4 of 5 stars

Why Nations Fail is a contribution in the field of Development Economics. Daron Acemoglu and James Robinson elaborate a thesis trying to explain "why some nations are prosperous while others fail and are poor". Their thesis of the difference between extractive and inclusive institutions is intellectually appealing and provides a framework for a analysis of the chances for current states to improve. However they can't explain the emergence of these institutions and concedes that their existence is the fragil product of a Darwinian process.

"However, when a critical junction arrives, these small differences that have emerged as a result of institutional drift may be the small differences that matter in leading otherwise quite similar societies to diverge radically"

There are some fundamental ideas where I disagree with Acemoglu and Robinson. The first is the title itself. For a nation to fail it first had had to succeed. The natural condition of most human societies through history is poverty and some states have thrived and prospered. At present time more and more nations have progress, a shift in history that is not accknowledge in the book. This problem is fundamental because in some of the cases the description is incomplete and inaccurate. For instance what we now know as Perú was better than the north of America 500 years ago. It is correct that the USA is way much better than Perú, and itself 500 years ago; but Perú is also better today than Perú 500 years ago. Perú didn't fail, but it didn't succeed like the USA.

"Peru is so much poorer than Western Europe and the United States today because of its institutions... five hundred years ago the Inca Empire, which occupied contemporary Peru, was richer, more technologically sophisticated, and more politically centralized than the smaller polities occupying North America."

I also find the institutional framework problematic and incomplete. The thesis is that inclusive political institutions and economic institutions are the cause of prosperity. This creates a four state model, being inclusive-inclusive the best and extractive-extractive the worst. Combinations of extractive-inclusive and inclusive-extractive yield mixed results, sometimes short-term prosperity or eventual political collapse. So far the model is OK. If institutions are so important, why didn't Acemoglu deepen in what institutions are important? Maybe because they can't.

"The outcome of political conflict is never certain, en even if in hindsight we see many historical events as inevitable, the path of history is contingent."

It is up to the reader to try to figure out from the cases what common elements may define the correct institutions. On the political side Acemoglu and Robinson favor democracy and not so much rule of law. A unbounded democracy can easily turn into a tyranny of the majority (see following issue). Among the economic institutions they favor private property which is a very static concept and overlooks entrepreneurship and price system.

A third issue is the predictive power of the model. A theory that fits to the past but can't predict to the future is not strong. For instance, Acemoglu and Robinson picture Brazil, after its inclusive democracy, as a success story which is not. Democracy in Brazil switched the balance of power but didn't transform the nature of the institutions. Poor respect for property rights and rule of law left the door open to corruption and populism. The turmoil in Brazil in 2017-18 and many Latin American nations give some hope but reality is that agendas remain populist. The problem with the predictive power of the model is that it has no power.

"extractive institutions can be replaced by inclusive ones. But it is neither automatic nor easy. A confluence of factors,..., is often necessary..... In addition some luck is key, because history always unfolds in a contingent way." (emphasis is mine)

The model of virtuous and vicious circles are easy to agree with Acemoglu and Robinson. They provide an explanation of the inertia that prevents institutional changes and help sustain the status quo, while giving hope for positive change and a warning for the fragility of inclusive nations.

"The synergies between extractive economic and political institutions create a vicious circle, where extractive institutions, once in place, tend to persist. Similarly, there is a virtuous circle associated with inclusive economic and political institutions. But neither the vicious nor the virtuous circle is absolute."

As a friend, Michael Strong, says "given MIT economics' traditional neglect of institutions,... Acemoglu should be regarded as a hero relative to his peers". Overall Acemoglu and Robinson provide a model to build on. Why Nations Fail description of history, although not accurate, is a point of reference to discuss what changes truly make nations prosper.

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The Frankenstein Candidate

Vinay Kolhatkar novel is set in a near future by the US elections of 2020. A multimillionaire, Frank Kenneth Stein, who decides to fund his own presidential campaign breaking with the traditional parties. Quite the opposite of a Donald Trump who has the money but not the brains, Stein has clear and consistent ideas, thus many time conflicting.

With a complex plot full of obscure characters the novel unfolds the worst crises in history due to the games politicians play. A game that they can't stop without burning themselves and therefor are willing to do whatever to keep the wheel spinning.

The democratic presidential candidate, Olivia Allen is facing as rival the Republican Vice-President Quentin Kirby but soon realizes who the real enemy is.

Olivia Allen is a iconic character; beautiful, successful professionally and socially. It is easy to identify with her honest will to improve the system. Her optimism about working hard and fix what needs to be fixed is appealing. It is easy to feel empathy for her struggle between facing these life challenges and saving her personal life. As many of us, she realizes that the task is paramount because it goes against the stakeholders of the system. Olivia's philosophical transformation is encouraging, a hope that if people decide to think and not just hope the system may change.

The Frankenstein Candidate is a work of fiction but also a believable future. If the political system doesn't overhauls itself, which is very improbable, the size of the next crisis can be unthinkable. With the size of national and local debts, the level of monetary emission, the choking regulatory framework, and the irrational obsession with climate change, the future of a world is not shinny. Can the system be changed from within or the chances are nil leaving the only hope on a third contender with clear ideas and the pockets to compete. 

Frank Stein campaigns around the ten commandment of government; "honesty, forbearance, temperance, respect, integrity, kinship, courage, justice, dignity and humanity". This could be a model to measure how good or bad is a proposal since most of the politician promises fail on several of them. Overall these commandments are just traits of humanity.

Nice novel for the times. Now that we have elections in different parts of the world and many are about choosing the least bad.

My rating 4 stars

Resistencia no violenta a regímenes autoritarios de base democrática

El juez Ricardo Rojas (@rmrojas58) nos trae "Resistencia no violenta a regímenes autoritarios de base democrática", un libro oportuno ante las múltiples y crecientes manifestaciones de rechazo de los ciudadanos hacia sus gobiernos (Guatemala, Honduras, Venezuela, Brasil, México, Argentina, etc.) 

El juez Rojas construye sobre la tesis de Gene Sharp sobre cómo funcionan las revoluciones no violentas frente a dictaduras. Existen muchas similitudes entre regímenes netamente autoritarios (producto de dictadores, golpes de estado o guerras) y aquellos que se disfrazan por haber llegado al poder por la vía democrática.

Uno de los primeros puntos que aborda Ricardo es cuestionar la legitimidad de todo gobierno que surge de un proceso democrático.

"es importante investigar de qué se está hablando cuando se utiliza este vocablo [democracia], pues dentro de sus tantos significados se esconden formas de gobierno autoritarias."

Los gobernantes electos con aspiraciones autoritarias traicionan a sus electores y olvidan que son simples empleados. En lugar de cumplir con las funciones definidas por la ley, creen que recibieron un cheque en blanco para violar los derechos de las personas en nombre de su misma defensa. 

La democracia no es una panacea y dentro del sistema republicano juega un rol que no debe ser deificado. 

"la idea de una democracia directa, del 'Pueblo' tomando decisiones por sí mismo respecto de los asuntos públicos, es tan romántica como impracticable"

Las medidas no violentas son mecanismos para contener los abusos de los gobiernos sobre los derechos individuales y no tanto para el derrocamiento de los mismos. Es así que Ricardo sugiere prevenir que los gobernantes puedan acumular poder y llegar a abusar del mismo. Para ello nos recuerda la importancia de cuidar los principios republicanos básicos como el respeto a la constitución, la independencia de poderes, el fortalecimiento de instituciones, la libertad de prensa, la descentralización del poder, y el control electoral, entre otros.

A diferencia de muchos casos tradicionales de totalitarismo la adhesión es más compleja en los casos analizados por el juez Rojas. Por ejemplo a la oposición se le critica como opositores de la democracia y la voluntad de la mayoría. Amén de estas reacciones, la organización de sistemas de resistencia es posible aún cuando el origen del poder hayan sido elecciones.

En la última parte Ricardo abarca los requerimientos organizacionales y de planificación para que los esfuerzos no se dispersen o se esfumen producto del cansancio y el conformismo. Con una buena estrategia la aplicación de algunas de los casi 200 prácticas no violentas de resistencia de Sharp se hace de forma ordenada y con objetivos claros, lo que les da mayor fuerza y efectividad. 

Como complemento el libro del juez Rojas incluye el texto "De la dictadura a la democracia. Un sistema conceptual para la Liberación" de Gene Sharp.

Indiscutiblemente el aporte de Ricardo es relevante. Cuando la presentación del libro es censurada y acusada de promover el desorden se puede apreciar su valor. Como dijo Winston Churchill "¿Tienes enemigos? Bien. Eso significa que has defendido algo, alguna vez en tu vida."

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