”Why Nations Fail” is an enthralling book authored by Daron Acemoglu and James A. Robinson. Upon reading it, I was enamored by its eye-opening facts. The book is divided into two significant sections: inclusive economic and political institutions and extractive economic and political institutions.
Some theories prove favorable for some states, but others fail. The book delves into the troubling reality of countries
facing aggravating poverty such as Mexico, Latin America, Haiti, Sierra Leone, Somalia, Nigeria, Congo Zimbabwe, and more. To illustrate the impact of institutions we can compare two cities in Mexico – Nogales Arizona, the richest city, and Nogales Sonora, the poorest city. Despite being in the same country, the stark differences in the lives of citizens stem from inclusive institutions in one way and extractive institutions in the other way.
An interesting example is Communist China, which boosts inclusive economic institutions but maintains extractive political institutions. Consequently, the Chinese have limited participation in the political process, raising debates about the country’s democracy. As China continues to grow economically, some argue that becoming a democratic nation through trade with the West might pave the way for further progress.
In the case of Pakistan, the country grapples with extractive and political institutions. The elite class exploits the nation’s resources, causing stagnation and perpetual poverty. The key to becoming prosperous lies in transitioning towards inclusive institutions and ensuring a robust system of checks and balances at the grassroots level, mirroring the path for struggling.
By analyzing the intricate relationship between institutions and a nation’s fate, “Why Nations Fail” calls for a deeper understanding of the driving forces behind societal development. It presents an insightful exploration of the paths countries can take toward success or failure. For anyone seeking to grasp the dynamics that shape nations, this book is a must-read.

BY: Maleeha Alam