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Why This Book Matters:
Why Nations Fail discusses why some nations in today’s world prosper while others are stuck in a cycle of poverty.
The Big Takeaways:
- Differences in institutions cause the quality of living in different countries.
- If Having inclusive institutions ensures power-sharing between groups of people, which leads to a more economically balanced society.
- England developed these institutions centuries ago when they began colonizing the world.
- England’s quick industrialization gave them advantages over the rest of the globe.
- When power is centralized, it poses disadvantages to the country’s development.
- Economic growth is constrained when political leaders are afraid of creative losses.
- The cycle of poverty is created from extortion by institutions.
- This happens when leaders prevent development and try to centralize power.
- While growth from institutions rooted in extortion is possible, it is not sustainable.
- It’s not sustainable because these institutions don’t prove incentives correctly.
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