Thesis: institutions (extractive vs inclusive) are what cause countries to fail or succeed in the long run.

A thorough book on an important question. It may not get everything right (I wouldn’t know), but seems to form a solid foundation for further progress in foreign policy.

Likes:

- Directly answers the common question, “Why are so many places able to observe policies of successful countries, but unable to emulate them?” By comparing the differences between Nogales, Arizona and Nogales, Sonora (directly across the border), the book discusses the contrast between the political and economic institutions of the U.S. and Mexico. Then zooms out to look at the differences between North and South America, showing that concentrated power creates a negative feedback loop (extractive institution) which prevents progress, even when corrupt leaders are overthrown. They also compare the Koreas.

- Dismisses the geography hypothesis by providing research that tropical medicine and agricultural science are not major factors in prosperity. Once institutions are properly established, there's no evidence that geographic factors have a significant impact on a nation’s well-being. The author of Guns, Germs, and Steel, who is an advocate for the geography hypothesis, even reviewed this book saying "Should be required reading for politicians and anyone concerned with economic development."

- States that natural resources are entirely dependent on a country’s institutions to determine whether they will be positive or negative. Diamonds cause major issues in Angola and Sierra Leone, but benefit Botswana. Russia and Saudi Arabia have experienced a rising GDP because of high natural resource prices, but that growth won't bring democratization.

- Spotlights Uzbekistan’s child labor, which has supposedly improved since the book's publication.

- Emphasizes that growth can still occur in extractive economies. The Soviet Union, Roman empire, and modern China, for example. China is discussed in depth, and remains to be determined.

- The proposed solution: to shift extractive institutions toward more inclusive institutions. "Either some preexisting inclusive elements in institutions, or the presence of broad coalitions leading the fight against the existing regime, or just the contingent nature of history can break vicious circles."

Dislikes:

- They don’t steelman other hypotheses (culture, religion, work ethic, disease, plants and animals, terrain, weather) much for comparison against their claim. They acknowledge geography and disease as influences, but not major factors in institutional development. The reader needs to do their own comparisons.

- The last chapter has many interesting claims about foreign aid, but doesn’t provide much for concrete advice on how to proceed. The best I found was "Perhaps structuring foreign aid so that its use and administration bring groups and leaders otherwise excluded from power into the decision making process, and empowering a broad segment of population might be a better prospect."