Summary of the book "WHY NATIONS FAIL" - RFS20

The book Why Nations Fail explores the income and standard-of-living disparities between rich and poor countries. The authors argue that institutions, rather than geography, culture, or the ignorance of leaders, are the primary determinant of prosperity. They distinguish between extractive institutions, which concentrate power and wealth in the hands of an elite, and inclusive institutions, which distribute power more broadly and create incentives for economic growth. Through historical examples such as the Glorious Revolution in England and Botswana’s development, the book demonstrates how inclusive institutions foster prosperity, while extractive institutions lead to failure.