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Rents and economic development: the perspective of Why Nations Fail

Author

Listed:
  • Daron Acemoglu

    (Massachusetts Institute of Technology)

  • James A. Robinson

    (University of Chicago)

Abstract

We present the approach to comparative economic development of Why Nations Fail. Economic prosperity requires inclusive economic institutions—those which create broad based incentives and opportunities in society. Extractive economic institutions, which lack these properties, create poverty. Variation in economic institutions is created by differences in political institutions. Inclusive economic institutions are the result of political choices which arise under inclusive political institutions: a strong state and a broad distribution of power in society. When either of these conditions fails one has extractive political institutions that lead to extractive economic institutions. We relate our analysis to Tullock’s notion of ‘rent seeking’.

Suggested Citation

  • Daron Acemoglu & James A. Robinson, 2019. "Rents and economic development: the perspective of Why Nations Fail," Public Choice, Springer, vol. 181(1), pages 13-28, October.
    • Handle: RePEc:kap:pubcho:v:181:y:2019:i:1:d:10.1007_s11127-019-00645-z
    DOI: 10.1007/s11127-019-00645-z
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Rents; Institutions; Inclusive; Extractive; Politics;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • O00 - Economic Development, Innovation, Technological Change, and Growth - - General - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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