Introduction:

The authors take on a sizable task of what makes for a successful nation. The answers emerge over the
course of a compelling book through a series of historical case studies purposely devised to hammer the
central point: economic success is the product of developed political institutions. These political
institutions are “inclusive” as opposed to “extractive”, while pluralism begets prosperity and by the
same token, autocracy spawns decline. Extractive institutions in which a small group of individuals does
their best to exploit - in the sense of Marx - the rest of the population and inclusive institutions in which
many people are included in the process of governing hence the exploitation process is either
diminished or absent. The keynote of the book highlights that there is a real sense in which history and
so the future is random. Many little unpredictable incidents or little variations in initial circumstances
will cause either comprehensive or exclusive establishments or a lot of loosely success or failure. This
puts the book directly within the camp of contemporary theory, particularly organic process theory, that
emphasizes the importance of unpredictable events and puts it against a lot of ancient analyses that
deemphasize the random part.

Diving from the islands to the mainland, the authors build an in-depth catalog of examples to bolster
their case. From the Caribbean to China, identical arguments hold sway: extractive political
establishments dedicated to the eudaimonia of the elite square measure counter-productive, whereas
the alternative holds for the contagious edges of comprehensive political establishments that
meaningfully guarantee property and political rights. The authors argue that political establishments
should be adequately centralized to produce basic public services together with justice, the
implementation of contracts, and education for any property economic action. providing these functions
square measure already in situ, comprehensive establishments empower innovative dynamism to
emerge and cause enduring growth as additionally incontestable by the commercial Revolution.
Extractive establishments may also deliver growth however only if the economy is closely unwoven
during a technological frontier. These extractive establishments can ultimately fail since innovations
square measures required to push the technological boundary. Hence, whereas success is also doable
for a jiffy beneath extractive establishments continued success is feasible solely beneath comprehensive
establishments.

Chapter fourteen – Breaking the mold:

This chapter delves deeper into 3 case studies: African country, The South of America, and China, which
all managed to transversal their approach around from extractive to comprehensive political
establishments that inspired economic development. The case of African country bestowed initial – that
nowadays has the identical level of development as some Japanese European countries, despite being as
poor as most of the remainder of the geographical region within the Nineteen Sixties, at which period
there have been but a hundred graduates within the entire country. The primary factor about Botswana
is that the inclusive political system was in existence pre-colonialism; any individual could rise to
become head in the region, and so chiefdom was not inherited, it was meritocratic, and someone could
only be chief with the will of the people.

The primary factor about Botswana is that the inclusive political system was in existence pre-
colonialism; any individual could rise to become head in the region, and so chiefdom was not inherited,
it was meritocratic, and someone could only be chief with the will of the people. Thus, the principal of
ruling with the will of the people, and on behalf of the people had been established for generations.
Another factor that promoted development was the circumstance that the English were not particularly
interested in the colonization of Botswana. In fact, in the 1890s, three Tswana chiefs visited England and
negotiated with the government to be part of a British Protectorate. In return for protecting the region
against Rhode’s South African expansionary policies, who colonized Zimbabwe and Zambia, all England
wanted was enough land to build a railway in order to open the interior. For this the Tswana were left
unharmed, crucially unextracted and without interfering institutions that had been set up to allow the
extraction to take place.

Following Colonialism, there was a significant development in the form of the discovery of diamonds.
The Tswana chiefs passed a law that all diamond wealth was to be national property, rather than giving
the rights to individuals or Corporations. This is in the stark contrast what neoliberals would claim
should be done, and like what happened in Sierra Leone. The effect of this was masses of public money
which was then used to pay for public services and hence their own development.

The emphasis in this chapter is that in all three cases certain key actors made important decisions at
crucial junctures in the country’s history e.g. when an existing leader died, such as Mao, creating a
power vacuum, or when Independence was gained in Botswana. The decisions taken at these crucial
points in history in these countries involved either fighting the power of entrenched elites as in China or
establishing laws that would prevent political corruption, like nationalizing the diamond supplies in
Botswana. It was these decisions, in contrast to decisions in countries like Sierra Leone where a national
rail line was sold off to benefit an elite, which led to economic development.

Chapter Fifteen – Understanding prosperity and poverty:

The most interesting part of this chapter relates to the predictive power of the proposed theory. The
author predicts that the growth of China will not be sustained, while America and Europe are likely to
get even richer than most of the countries in the rest of the world due to their most inclusive
institutions. Nations that have not undergone any significant state centralization such as Afghanistan,
Somalia, and Haiti are unlikely to witness any development. Some Latin American counties most
remarkably Brazil, Chile, and Mexico are set to grow as are Tanzania and Ethiopia in African countries.

The next section “the irresistible charm of authoritarian growth” highlights the flaws of modernization
theory; the economic growth does not necessarily lead to more inclusive political institutions. Germany,
Russia, and China are a few examples of the exploitive regimes that have pursued very rapid economic
growth in the last 60 years. This chapter also deals with obstructions in terms of development. Firstly,
any attempt at engineering policy changes as attempted by neoliberalist throughout the 1980s and 90s.
Because if a country is politically corrupt, they just subvert the policy changes; privatization happens,
but the people winning the contracts are the brothers of the ministers. Thus, the actors within
developing countries are constrained by their institutions, and if these are extractive then any design to
engineering change will ultimately result in further extraction. Any aid money going into a country with
extractive institutions will ultimately end up being extracted. The authors do argue, however, that even
if only 20% of aid money reaches its ultimate destination then it’s worth it.

The chapter and book round off by going back to the English and US revolutions which resulted in
institutions becoming more inclusive – what is required for development is a plurality of voices
demanding to be heard by government and being heard. This cannot be imposed from above but seems
to have to become from below.

In this sense, any attempt to engineer growth and provide aid seem pointless – the only things that
make any sense are campaigns oriented towards empowerment and making sure media is free because
the later foster the former.
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