Why nations fail
You are invited to the book discussion of “Why nations fail”.
Date: October 3
Location: American University of Armenia
Speakers: Avetik Mejlumyan & Armen Grigoryan
Daron Acemoglu and James Robinson’s “Why nations fail” book is one of the hottest books. THe celebrity books discussed the reasons behind the successful and failed countries based on the rich historical evidence. The cornerstone of the book is idea that for not the geographical, geopolitical & climatic factors are influential for the success of the country but the political and economic institutions. Those institutions might be either extractive or inclusive and the countries that have inclusive institutions have more chances for success.
On the other hand, the countries that have extractive institutions are deemed to failure as they create an atmosphere of fear. People are not assured of the safety of their private property hence they are not prone to investment and innovation as someone may just take away whatever the person may have created/invented or just saved. The representative of the countries with extractive institutions has been afraid of constructive destruction as it is considered that the new economic engaged people will require their share of the power and authority. For example, Russia and Austria-Hungary were skeptic about the factories and the railroads as they might create nodes for the gathering of people with ideas of revolutions.
The speakers are sure that they may apply the theory of institutions to explain the socio-economic situation of Armenia