(2012-10-23) Why Nations Fail Acemoglu Robinson Vs Diamond

Jason Kottke notes Chrystia Freeland piece on the self-defeating policies and attitudes of the 1% (Upper Class), as they create an Extractive State which will lead to a Failed State.

He says she's inspired by Why Nations Fail ISBN:9780307719232 by Daron Acemoglu and James Robinson. Attempting to engineer prosperity without confronting the root cause of the problems—extractive institutions and the politics that keeps them in place—is unlikely to bear fruit. (Economic Development)

Jared Diamond criticized the book in June over what he felt was a downplaying of his own Guns Germs An Steel geographic. My overall assessment of the authors’ argument is that inclusive institutions, while not the overwhelming determinant of prosperity that they claim, are an important factor. Perhaps they provide 50 percent of the explanation for national differences in prosperity.

They responded in August. That these geographic factors cannot by themselves account for prosperity is illustrated by an empirical pattern we discuss—the “reversal of fortune.”... It is not characteristics of a natural resource but the institutions that determine whether it is a curse or a blessing—diamonds are a curse for Sierra Leone and Angola, and a blessing for Botswana... Third, Diamond claims that our revisionist take on the Neolithic Revolution, based on the idea that sedentary life and social complexity (Civilization) came before farming (Agriculture), suffers from a “complete absence of evidence” when in fact it is now the conventional wisdom amongst archaeologists.

Hmm, I hadn't heard that before. Wikipedia lists 9 different theories as to the factors that drove populations to take up agriculture without treating any one as dominant. Most of them seem to put agriculture before social complexity...

Fourth, Diamond suggests that, by eschewing geographic determinism, our theory is as if institutions appeared “randomly.” This is not a fair characterization. Though at times the process of institutional development has been influenced by geography or disease ecology (as our own academic research joint with Simon Johnson has documented), these are not the major factors shaping institutional variation today. But this does not mean that institutional dynamics are simply random; our book explains how institutional variation today is largely a systematic outcome of historical processes, and how these processes can be studied, revealing, for example, why Europe, the United States, and Australia are richer than the Middle East, Africa, and Latin America.

(Diamond's response is at the end of the author's response.)