Why Nations Fail: The Origins of Power, Prosperity, and Poverty

superior set of British institutions is widespread and used to explain U.S. exceptionalism (Fisher, 1989) and also patterns of comparative development more generally (La Porta, Lopez-de-Silanes, and Shleifer, 2008). The works of Banfield (1958) and Putnam, Leonardi, and Nanetti (1994) are very influential cultural interpretations of how one aspect of culture, or “social capital,” as they call it, makes the south of Italy poor. For a survey of how economists use notions of culture, see Guiso, Sapienza, and Zingales (2006). Tabellini (2010) examines the correlation between the extent to which people trust each other in Western Europe and levels of annual income per capita. Nunn and Wantchekon (2010) show how the lack of trust and social capital in Africa is correlated with the historical intensity of the slave trade.
    The relevant history of the Kongo is presented in Hilton (1985) and Thornton (1983). On the historical backwardness of African technology, see the works of Goody (1971), Law (1980), and Austen and Headrick (1983).
    The definition of economics proposed by Robbins is from Robbins (1935), p. 16.
    The quote from Abba Lerner is in Lerner (1972), p. 259. The idea that ignorance explains comparative development is implicit in most economic analyses of economic development and policy reform: for example, Williamson (1990); Perkins, Radelet, and Lindauer (2006); and Aghion and Howitt (2009). A recent, forceful version of this view is developed in Banerjee and Duflo (2011).
    Acemoglu, Johnson, and Robinson (2001, 2002) provide a statistical analysis of the relative role of institutions, geography, and culture, showing that institutions dominate the other two types of explanations in accounting for differences in per capita income today.
C HAPTER 3 : T HE M AKING OF P ROSPERITY AND P OVERTY
    The reconstruction of the meeting between Hwang Pyŏng-Wŏn and his brother is taken from James A. Foley’s interview of Hwang transcribed in Foley (2003), pp. 197–203.
    The notion of extractive institutions originates from Acemoglu, Johnson, and Robinson (2001). The terminology of inclusive institutions was suggested to us by Tim Besley. The terminology of economic losers and the distinction between them and political losers comes from Acemoglu and Robinson (2000b). The data on Barbados comes from Dunn (1969). Our treatment of the Soviet economy relies on Nove (1992) and Davies (1998). Allen (2003) provides an alternative and more positive interpretation of Soviet economic history.
    In the social science literature there is a great deal of research related to our theory and argument. See Acemoglu, Johnson, and Robinson (2005b) for an overview of this literature and our contribution to it. The institutional view of comparative development builds on a number of important works. Particularly notable is the work of North; see North and Thomas (1973), North (1982), North and Weingast (1989), and North, Wallis, and Weingast (2009). Olson (1984) also provided a very influential account of the political economy of economic growth. Mokyr (1990) is a fundamental book that links economic losers to comparative technological change in world history. The notion of economic losers is very widespread in social science as an explanation for why efficient institutional and policy outcomes do not occur. Our interpretation, which builds on Robinson (1998) and Acemoglu and Robinson (2000b, 2006b), differs by emphasizing the idea that the most important barrier to the emergence of inclusive institutions is elites’ fear that they will lose their political power. Jones (2003) provides a rich comparative history emphasizing similar themes, and Engerman and Sokoloff’s (1997) important work on the Americas also emphasizes these ideas. A seminal political economy interpretation of African underdevelopment was developed by Bates (1981, 1983, 1989), whose work heavily influenced ours. Seminal studies by Dalton (1965) and Killick (1978) emphasize the role of politics in African development and particularly how the fear of losing political power influences economic policy. The notion of politicallosers was previously implicit in other theoretical work in political economy, for instance, Besley and Coate (1998) and Bourguignon and Verdier (2000). The role of political centralization and state institutions in development has been most heavily emphasized by historical sociologists following the work by Max Weber. Notable is the work of Mann (1986,