Why Nations Fail, Famine and the Nobel Prize
The 2024 Nobel Prize for Economics was awarded in October to the authors Daron Acemoglu and James A. Robinson in part for the analysis of international inequalities in their best-selling 2012 book Why Nations Fail: The Origins of Power, Prosperity and Poverty (Crown Publishers), which arrays economic development experiences of many countries to argue that poverty and famine are due to a lack of inclusive institutions allow for broad participation in decision-making processes and provide incentives for innovation and productivity. The authors refer to “extractive” examples where the interests of elites are empowered over the needs of the population.
While not specifically exploring hunger, the authors touch on agriculture and food insecurity, for instance when comparing North Korea (characterized by extractive institutions) and South Korea (inclusive), including North Korea’s drift toward famines. The authors also look at the extractive rule of Robert Mugabe in Zimbabwe, which resulted in famine. They write: “The persistence of poverty in many parts of the world is not due to lack of resources or ignorance… but to extractive economic institutions.”
Acemoglu teaches economics at the Massachusetts Institute of Technology, and Robinson at Harvard University. They write: “economies based on the repression of labor and systems such as slavery and serfdom are notoriously noninnovative. This is true from the ancient world to the modern era. In the United States, for example, the northern states took part in the Industrial Revolution, not the South. Of course slavery and serfdom created huge wealth for those who owned the slaves and controlled the serfs, but it did not create technological innovation or prosperity for society.
Governments resist agricultural reforms that can mitigate malnutrition and poor health because of fear. “”Fear of creative destruction is often at the root of the opposition to inclusive economic and political institutions.”
The authors note: “In many African countries, the majority of the labor force works in agriculture, yet agricultural productivity is very low…. The Green Revolution in agriculture… had a major impact on the lives of millions of people, but its benefits were highly unevenly distributed.”
Acemoglu and Robinson acknowledge that geography and culture play some role, as does agency. But they array evidence that inclusive economic institutions like property rights, rule of law, ease of starting businesses, and open, competitive markets create incentives for investment, innovation, and widespread economic participation – driving sustained growth. Echoing decades of comments by other economists, they observe that many poor nations are trapped in a “vicious circle” where extractive political institutions inhibit economic reform and preserve the power and wealth of elites.
Some critics of the authors’ argument focus on reverse causality. In other words, wealthier, modernized countries are more likely to foster inclusive institutions. Bill Gates critiqued the authors for attributing Venice’s decline to institutional changes rather than external factors like competition in trade routes. Similarly, Gates argued that the authors overlook environmental factors like droughts in explaining the collapse of civilizations such as the Mayans.
S Hansch