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Rents and economic development: the perspective of Why Nations Fail

  • Daron Acemoglu
  • James A. RobinsonEmail author
Article

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’.

Keywords

Rents Institutions Inclusive Extractive Politics 

JEL Classification

D72 D78 O00 O43 

Notes

Acknowledgements

We thank two anonymous referees and the editor for their comments and suggestions and Alex Carr for her editorial assistance.

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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Department of EconomicsMassachusetts Institute of TechnologyCambridgeUSA
  2. 2.Harris School of Public PolicyUniversity of ChicagoChicagoUSA

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