Why Nations Fail (mini review)

I’ve worked my way through a lot of recent books which emphasize the importance of geography and the role it plays in the rise & fall of empires. In contrast, “Why Nations Fail” brings a different perspective, suggesting a country’s approach to politics as the most important element. The authors assert that long term national success is largely determined by whether a country has an “extractive” (benefit the few) or “inclusive” (benefit the many) approach to governance. It’s not entirely black and white, as extractive governments can be successful at different stages of development and the book details this, providing many interesting examples from history.

I enjoyed it. The book brings a different perspective and is extremely well researched. I also found myself generalizing the lessons to many other aspects of life. This was particularly true of the sections which illustrate how nations who win their freedom through revolution, often end up upholding the same negative and oppressive behaviors as their previous captors. In these cases, applying well known free trade tactics (such as an independent central bank) has little benefit — because the underlying system is still exclusionary or corrupt. It reminded of corporate / company culture and the overemphasis that is sometimes placed on implementations (e.g. messaging vs email debates, open space vs closed space, diversity quotas) rather than the underlying culture (e.g. building trust, increasing transparency, reducing communication overhead, rewarding inclusive behavior, etc).

There are some notable reviewers of “Why Nations Fail”. Zuckerberg considers this “required reading” for politicians and I agree. Because of the parallels to the business / startup world, I think it’s valuable for anyone looking at organizational design and culture as well. By contrast, Bill Gates disliked the book and produced a very negative review (so much so that the authors published a rebuttal).

While it wasn’t perfect (I found repetitive and dismissive of other theories at times), I thought it was very valuable overall. Even if you don’t read the whole thing, it’s definitely worth finding a good summary online.

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