Daron Acemoglu, a Professor of Economics at the Massachusetts Institute of Technology (MIT), co-authored a superb book titled Why Nations Fail alongside Harvard Professor James Robinson.

His book explores the critical role state institutions play in shaping the economic paths of nations.

Daron argues that the state is essential in creating an environment conducive to investment and innovation. This is achieved through:

  • the guarantee of private property rights,
  • the enforcement of contract law, and
  • the provision of essential public services such as education and infrastructure.

I don’t quite agree with him, but I do see his point and think there is indeed validity in it.

The state’s role

The governance structure of the state is focal point of his argument.

For example, he argues that, to foster economic growth, the state must be democratically controlled. This means creating institutions and laws that serve the majority, not just the privileged elite.

The state should also maintain a monopoly on the use of violence to ensure social order and stability. As a supporter of (true) monarchy, I agree with this.

Libya invaded by NATO, circa 2011

However, the conversation becomes more complex in that he also explores the unique challenges faced by African countries and why they are, as Trump once said, shitholes.

Basically, Daron suggests that the historical burden of colonialism, Western-backed wars, combined with arbitrarily drawn borders, has led to persistent ethnic and political divisions, all of which lead to instability and truncated growth.

Conversation

The foundation of any country’s development must be education, and Africa cannot develop without an education system that serves the needs of its people rather than the desires of foreign interests.

Julius Nyerere

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