this is flute C presenting to you a summary of why donations fail the origins of power prosperity and poverty

a book by Daron Acemoglu and James Alan Robinson both the authors are economists a small blue is a
professor at MIT wayans Robinson is a professor at Harvard University let's summarize by saying that
inclusive rather than extractive economic institutions are a reason why developed countries are ready the state
creates incentives for people to invest and innovate by assuring private property rights enforcing contract laws
enabling investment and growth by providing quality education and infrastructure there needs to be a
democratic principle at work in which people in politics work for the benefit of majority rather than just working
to benefit the rich now imagine a corrupted data working for its own benefit this is a perfect example
representing extractive economy constitution resulting a state in poverty Bayes rule - and Robinson both are of
the view that there has been a vicious cycle and virtuous cycle at work in many countries over the last three to
four centuries a number of comparative studies of countries led to the conclusion that institutional
infrastructures play a major role in the development or under development of a country

chapter one so close and yet so different this chapter shows a comparison of the two sides of no gains half of
which is in Arizona in the United States the other half in Mexico basically it's a comparison between America
and Latin America or America and Mexico when you think of America you think of Handsome's and
repackages higher literacy rate pave roads law and order the opposite of all these constitute Mexico the
authors are of the belief that this huge difference cannot be because of environment and culture it must be
because of politics and economic opportunities going back to early colonialism the Spanish left a legacy of
elite governance and a dart of political rights for the majority of Mexicans the first to be colonized under a
system of slavery and extraction contrast the absence of slavery among indigenous population and much
lower population densities in north America saturn mainly by the english meant that a slave system simply
would not work the rest of the chapter goes on to argue that the next 300 years of history are crucial to
understanding why America is now so wealthy and why most of Latin America is so for

Chapter two theories that don't work all the theories like the geography the culture and the ignorant
hypotheses are debunked by the authors in this chapter

chapter three the making of prosperity and poverty this chapter contrasts North and South Korea South Korea
is living standards ten times higher than North Korea in the south the government invested in education private
property and markets along with investment and economic growth were encouraged whereas in the North
private property and markets were backed which resulted in stagnation engines of prosperity education for all
is crucial for innovation in an advanced technological world this is what all developed nations have and what
may undeveloped nations lack a case study of Congo shows that the ruling elites resist changes that make
institutions more inclusive as it will mean less prosperity for themselves

chapter four small differences and critical junctures the weight of history by examining different circumstances
throughout history like the Black Death Magna Carta 1215 and the Industrial Revolution the authors concluded
that history and critical junctures shape the paths of political and economic trajectory

chapter 5 growth under extractive institutions in this chapter using the example of Soviet Union that collapsed
as a result of unsustainable growth the authors foresee the collapse of China's political system two-six drifting
apart inclusive institutions can be reversed resulting in the downfall of an entire nationfor example Rome and
Venice

chapter 7 the turning point this chapter analyzes the transformation of England's extractive institutions to
inclusive institutions from magna carta to war of roses to Glorious Revolution England went through the stages
of creative destruction which is the biggest fear of the elite usually the ruling class

chapter 8 barriers to development in this chapter the author's I'll find the barriers to development which are
Ottomans a host printing press absolutist regime blocked the spread of industry as a result they lag behind

chapter 9 reversing development the authors analyzed the Scramble for Africa another example of the civil war
in Sierra Leone is a proof that colonial developments are volatile and bound for failure a graph showing GDPs
of various countries is given for your reference

chapter 11 the virtuous cycle the author's highlight the effects of inclusive institutes within a state which
includes the removal of extractive economic relations creating a dynamic economy and creating checks and
balances as a result a positive feedback loop is generated where people trust a government and are
responsible citizens of a state
chapter 12 the vicious cycle in comparison to the virtuous cycle this generates a negative feedback loop where
people do not trust the government in order to understand this and extraction of wealth from people a case
study of colonialism using the example of Sierra Leone is shared

chapter 13 why nations fail today using the example of Zimbabwe's leader the authors concluded that the most
common reason why nations fail today is because they have extractive institutions which do not create
incentives to save invest and in weight the only solution is to transform the extractive institutions into inclusive
ones

chapter 14 breaking the moon the authors predict that America and Europe are likely to get even richer than
countries in most of the rest of the world Afghanistan Somalia and Haiti are unlikely to witness any
development growth will not be retained in China the only thing that makes any sense our programs oriented
towards empowerment and making sure media is free because the later fosters the former why do nations fail
in a nutshell economic prosperity depends on political and economic institutions which are inclusive or
extractive virtuous cycle strengthens inclusive institutions and vicious cycle strengthens extractive institutions
limitations the authors failed to address poverty related issues reasons of inclusive and extractive institutions
is not given and like Norns of all the three hypotheses is also leaving a question mark the unknown causes of
unsustainable growth no relevance to current global affairs and to many historical concepts and examples
make the readers rule their thinking hats signing off by leaving this simple yes/no questions that all Pakistanis
need to ask themselves