Introduction:
The question of why some nations succeed while others fail has puzzled
social scientists for centuries. The study of comparative politics, economics,
and history has attempted to answer this question from various
perspectives, and one of the most prominent explanations is the institutional
approach. This approach, popularized by Daron Acemoglu and James A.
Robinson's book Why Nations Fail, argues that the quality of a nation's
institutions is the main determinant of its economic and political success or
failure. In this paper, we will explore this argument, examine its main pillars,
and provide real-life examples and references to support or challenge its
claims.
The Main Argument of the Institutional Approach:
Acemoglu and Robinson's institutional approach argues that the main
difference between prosperous and poor nations is their institutions.
Institutions refer to the formal and informal rules, norms, and practices that
govern human behavior and interactions. Good institutions, according to the
authors, are those that create inclusive economic and political systems,
where everyone has equal opportunities to participate in the market, engage
in productive activities, and influence the government's decisions. In
contrast, bad institutions create extractive economic and political systems,
where a small elite monopolizes power, resources, and opportunities, while
the rest of the population is excluded, exploited, and repressed.
The institutional approach identifies two main types of institutions: extractive
and inclusive. Extractive institutions are those that extract resources, labor,
and wealth from the population without providing them with any
compensation or benefits. Examples of extractive institutions include
feudalism, slavery, colonialism, and autocracy. These institutions are
characterized by a lack of property rights, a weak rule of law, a limited
access to education and information, and a high degree of corruption and
rent-seeking. In contrast, inclusive institutions are those that create a level
playing field, where individuals and firms can innovate, compete, and
cooperate, and where the government serves as a neutral arbiter that
enforces contracts, protects property rights, and provides public goods and
services. Examples of inclusive institutions include democracy, capitalism,
and the welfare state. These institutions are characterized by a strong rule of
law, a high degree of accountability and transparency, a low level of
corruption and rent-seeking, and a broad access to education and
information.
Real-life Examples:
To illustrate the institutional approach's main argument, we can examine
some real-life examples of nations that succeeded or failed due to their
institutions. One of the most famous examples is the comparison between
North and South Korea. Both Koreas had similar cultural, ethnic, and
geographical backgrounds, but after World War II, they adopted different
institutional paths. North Korea adopted an extractive institutional model,
where the communist party monopolized power, resources, and
opportunities, while South Korea adopted an inclusive institutional model,
where the government promoted democracy, capitalism, and social welfare.
As a result, South Korea became one of the fastest-growing economies in the
world, with a high level of human development, while North Korea became
one of the poorest and most repressive countries in the world, with a low
level of human development.
Another example is the comparison between Botswana and Zimbabwe. Both
countries were colonized by the British in the 19th century and gained
independence in the 1960s. Botswana adopted an inclusive institutional
model, where the government promoted democracy, capitalism, and the rule
of law, while Zimbabwe adopted an extractive institutional model, where the
ruling elite seized land, resources, and power, and suppressed opposition
and civil society. As a result, Botswana became one of the most prosperous
and stable countries in Africa, with a high level of human development, while
Zimbabwe became one of the poorest and most unstable countries in Africa,
with a low level of human development.
Critiques and Challenges:
