In Why Nations Fail: The Origins of Power, Prosperity and Poverty (Amazon,) authors Daron Acemoglu and James A. Robinson compress over 15 years of research on what drives the growth of nations.
Some hard-hitting excerpts:
- Poor countries are poor because those who have power make choices that create poverty. They get it wrong not by mistake or ignorance but on purpose.
- Growth moves forward only if not blocked by the economic losers who anticipate that their economic privileges will be lost and by the political losers who fear that their political power will be eroded.
- Many of the micro-market failures that are apparently easy to fix may be illusory: the institutional structure that creates market failures will also prevent implementation of interventions to improve incentives at the micro level.
India is a bit like the hapless victim in the old Ajit joke, immersed in a vat of liquid oxygen. The liquid will not let it live and the oxygen will not let it die.
Recommendation: must read!