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Aprovocative new theory of political economy explaining why the world is divided into nations with wildly differing levels of prosperity

Why are some nations more prosperous than others?Why Nations Fail sets out to answer this question, with a compelling and elegantly argued new theory: that it is not down to climate, geography or culture, but because of institutions. Drawing on an extraordinary range of contemporary and historical examples, from ancient Rome through the Tudors to modern-day China, leading academics Daron Acemoglu and James A. Robinson show that to invest and prosper, people need to know that if they work hard, they can make money and actually keep it - and this means sound institutions that allow virtuous circles of innovation, expansion and peace.Based on fifteen years of research, and answering the competing arguments of authors ranging from Max Weber to Jeffrey Sachs and Jared Diamond, Acemoglu and Robinson step boldly into the territory of Francis Fukuyama and Ian Morris. They blend economics, politics, history and current affairs to provide a new, powerful and persuasive way of understanding wealth and poverty. They offer a pragmatic basis for the hope that at'critical junctures'in history, those mired in poverty can be placed on the path to prosperity - with important consequences for our views on everything from the role of aid to the future of China.

REVIEWS

'You will have three reasons to love this book. It's about national income differences within the modern world, perhaps the biggest problem facing the world today. It's peppered with fascinating stories that will make you a spellbinder at cocktail parties - such as why Botswana is prospering and Sierra Leone isn't . And it's a great read. Like me, you may succumb to reading it in one go, and then you may come back to it again and again.', Jared Diamond, Pulitzer-prize-winning author of bestselling books including'Guns, Germs, and Steel'and'Collapse'

'For those who think that a nation's economic fate is determined by geography or culture, Daron Acemoglu and Jim Robinson have bad news. It's man-made institutions, not the lay of the land or the faith of our forefathers, that determine whether a country is rich or poor. Synthesizing brilliantly the work of theorists from Adam Smith to Douglass North with more recent empirical research by economic historians, Acemoglu and Robinson have produced a compelling and highly readable book. And their conclusion is a cheering one: the authoritarian"extractive"institutions like the one's that drive growth in China today are bound to run out of steam. Without the inclusive institutions that first evolved in the West, sustainable growth is impossible, because only a truly free society can foster genuine innovation and the creative destruction that is its corollary.', Niall Ferguson, author of'The Ascent of Money'

'This fascinating and readable book centers on the complex joint evolution of political and economic institutions, in good directions and bad. It strikes a delicate balance between the logic of political and economic behavior and the shifts in direction created by contingent historical events, large and small at'critical junctures'. Acemoglu and Robinson provide an enormous range of historical examples to show how such shifts can tilt toward favorable institutions, progressive innovation and economic success or toward repressive institutions and eventual decay or stagnation. Somehow they can generate both excitement and reflection.', Robert Solow, Nobel Laureate in Economics

'It's the politics, stupid! That is Acemoglu and Robinson's simple yet compelling explanation for why so many countries fail to develop. From the absolutism of the Stuarts to the antebellum South, from Sierra Leone to Colombia, this magisterial work shows how powerful elites rig the rules to benefit themselves at the expense of the many. Charting a careful course between the pessimists and optimists, the authors demonstrate history and geography need not be destiny. But they also document how sensible economic ideas and policies often achieve little in the absence of fundamental political change.', Dani Rodrik, Kennedy School of Government, Harvard Universitry

'Two of the world's best and most erudite economists turn to the hardest issue of all: why are some nations poor and others rich? Written with a deep knowledge of economics and political history, this is perhaps the most powerful statement made to date that'institutions matter.'A provocative, instructive, yet thoroughly enthralling book.', Joel Mokyr, Robert H. Strotz Professor of Arts and Sciences and Professor of Economics and History, Northwestern University

'Imagine sitting around a table listening to Jared Diamond, Joseph Schumpeter, and James Madison reflect on over two thousand years of political and economic history. Imagine that they weave their ideas into a coherent theoretical framework based on limiting extraction, promoting creative destruction, and creating strong political institutions that share power and you begin to see the contribution of this brilliant and engagingly written book.', Scott E. Page, University of Michigan and Santa Fre Institute

'In this stunningly wide ranging book Acemoglu and Robinson ask a simple but vital question, why do some nations become rich and others remain poor? Their answer is also simple -- because some polities develop more inclusive political institutions. What is remarkable about the book is the crispness and clarity of the writing, the elegance of the argument, and the remarkable richness of historical detail. This book is a must read at a moment where governments right across the western world must come up with the political will to deal with a debt crisis of unusual proportions.', Steve Pincus, Bradford Durfee Professor of History and International and Area Studies, Yale University

'Acemoglu and Robinson -- two of the world's leading experts on development -- explain why it is not geography, disease, or culture which explains why some nations are rich and some poor, but rather a matter of institutions and politics. This highly accessible book provides welcome insight to specialists and general readers alike.', Francis Fukuyama

'Some time ago a little known Scottish philosopher wrote a book on what makes nations succeed and what makes them fail. The Wealth of Nations is still being read today. With the same perspicacity and with the same broad historical perspective, Daron Acemoglu and James Robinson have re-tackled this same question for our own times. Two centuries from now our great-great-...-great grandchildren will be, similarly, readingWhy Nations Fail.', George Akerlof, Nobel Laureate in Economics, 2001

'Acemoglu and Robinson have made an important contribution to the debate as to why similar-looking nations differ so greatly in their economic and political development. Through a broad multiplicity of historical examples, they show how institutional developments, sometimes based on very accidental circumstances, have had enormous consequences. The openness of a society, its willingness to permit creative destruction, and the rule of appear to be decisive for economic development.', Kenneth J. Arrow

'This not only a fascinating and interesting book: it is a really important one. The highly original research that Professors Acemoglu and Robinson have done, and continue to do, on how economic forces, politics and policy choices evolve together and constrain each other, and how institutions affect that evolution, is essential to understanding the successes and failures of societies and nations. And here, in this book, these insights come in a highly accessible, indeed riveting form. Those who pick this book up and start reading will have trouble putting it down.', Michael Spence

'Why Nations Fail is a truly awesome book. Acemoglu and Robinson tackle one of the most importantproblems in the social sciences -- a question that has bedeviled leading thinkers for centuries -- and offer an answer that is brilliant in its simplicity and power. A wonderfully readable mix of history, political science, and economics, this book will change the way we think about economic development.Why Nations Fail is a must read book.', Steven Levitt, author of Freakonomics

'Why Nations Fail is so good in so many ways that I despair of listing them all. It is an excellent book and should be purchased forthwith, so to encourage the authors to keep working.', Charles C. Mann, author of 1491 and 1493

'In this delightfully readable romp through 400 years of history, two of the giants of contemporary social science bring us an inspiring and important message: it is freedom that makes the world rich. Let tyrants everywhere tremble!', Ian Morris, Stanford University, author of Why the West Rules - For Now

'The authors convincingly show that countries escape poverty only when they have appropriate economic institutions, especially private property and competition. More originally, they argue countries are more likely to develop the right institiutions when they have an open pluralistic political system with competition for political office, a widespread electorate, and openness to new politcial