Presentation on Why Nations Fail: The Origins of Power, Prosperity and Poverty, Cairo, Egypt, January 20, 2013

In light of the region’s economic and political challenges, ERF invited Harvard professor and ERF senior associate James Robinson to present his book Why Nations Fail: The Origins of Power, Prosperity and Poverty.

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Written with Daron Acemoglu, an economics professor at the Massachusetts Institute of Technology, this groundbreaking book attempts to answer the question that has kept experts guessing for centuries: Why are some nations rich and others poor, divided by wealth and poverty?

According to the authors: “while economic institutions are critical for determining whether a country is poor or prosperous, it is politics and political institutions that determine what economic institutions a country has.” Only inclusive political and economic institutions provide incentives for people to acquire (cutting– edge) skills and innovate. On the other hand “extractive” political and economic institutions exist for the benefit of a small elite which exploits the masses who remain poor and disadvantaged. Extractive systems unlike the inclusive ones, fail to sustain growth and development. They are unable to generate technological change. The issues presented in the book are relevant to the political struggle in the region specifically in Arab Spring countries.

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“It is now the time to think about ways in which we can formulate our political institutions in order to ensure prosperity and to make sure we are on the right track,” added Ahmed Galal, managing director of ERF.

Robinson feels that the “Arab Spring was a revolt against these extractive institutions. The theory of the book suggests that this will only lead to a more inclusive society and not the iron law of oligarchy, if a broad coalition forms and sustains itself.”

However, like all good books, it raises its own questions. Discussant Lisa Anderson pointed out that while she admired the book, it was necessary to point out that simply identifying institutions was only a start. Libya and Egypt, for example, had both embarked on the long road to democracy but because they had both started at two very different points, it wasn’t much good simply identifying them both as having been extractive societies.

The event attracted a diverse crowd, it was well attended by the media, public figures and civil society representatives.

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