South Africa a Comparative Review

Overview

“Why Nations Fail: The Origins of Power, Prosperity, and Poverty” (2012) by economists Daron Acemoglu and James A. Robinson is a seminal work exploring why some countries thrive economically while others remain trapped in poverty. Drawing on historical analysis from ancient Rome to modern Botswana, the authors reject common explanations like geography, culture, or ignorance, arguing instead that the root cause lies in the nature of a nation’s institutions — the rules and systems governing politics and economics.
Core Thesis

The book’s central argument is that inclusive institutions foster prosperity by encouraging broad participation, innovation, and fair competition, while extractive institutions concentrate power and wealth in the hands of a few elites, perpetuating poverty and instability. Inclusive setups protect property rights, provide public education, and enable access to finance, sparking creative destruction (innovation that disrupts old ways for progress). Extractive ones stifle growth to maintain elite control, often leading to vicious cycles of exploitation.
Key Concepts

Inclusive vs. Extractive Institutions: Inclusive ones (e.g., democracies with strong rule of law) distribute power and economic opportunities widely, leading to sustained growth. Extractive ones (e.g…