I picked this book up because I wanted to learn more about the dynamics of flourishing in open systems. As we're working to architect an open system for our local church, I've found myself thinking quite a bit about how open systems work and what causes them to flourish. Nations (at least ones with free markets) organize as open systems and I was curious to see what was to be learned here.

The scope of this work is quite impressive. The authors are working to create a more-or-less universal theory of poverty on a national scale. What causes it and why do some nations flourish and others decline? Acemoglu and Robinson argue that the critical factor is whether a nation has inclusive or extractive economic institutions. Inclusive economic institutions spread wealth around and encourage the kind of long-term thinking that drives investment, innovation, and expansion. Extractive institutions concentrate wealth in the hands of a few, resulting in gain in the short term for a few, and net loss for all over time.

Acemoglu and Robinson continue to argue that for these inclusive economic institutions to remain inclusive over time, they need to be matched with inclusive, not extractive political institutions. Where political institutions allow for the power of a few to become too deterministic, those in power will bend the economic institutions for their benefit. To that end, the two have to exist together: inclusive economic institutions that spread wealth around, and inclusive political institutions that spread power around. Where those both align, a nation is on a good long-term course.

I found the analysis in Why Nations Fail interesting and I think there are many elements of validity to it. It strikes me as a little overly simple - the book comes across as if this is almost the only factors that matter in determining the long-term trajectory of a nation, and I have to believe it's just not that simple. That being said, they survey a vast number of historical examples and make a compelling case. It's certainly made me reflect quite a bit on economic and political dynamics and what they create over time.