Discuss The Factors Responsible For Political And Economic Success And Failure Of States

1407 Words Apr 26th, 2016 6 Pages
In devising economic policy, leaders do face certain constraints in the broad historical forces that have shaped their countries’ social and institutional structures. However, it is difficult to say that leaders are solely constrained by the historical factors and cannot ignore nor harness the historical factors to achieve economic and political goals. Throughout history, we have witnessed that leaders have been able to devise and implement economic policy despite the constraint of historical forces as well as cases in which they faced constraints.
Acemoglu and Robinson (2012) argue that nations fail due to politics and path-dependent ways, but inclusive economic institutions lead to economic growth. The authors try to explain the factors responsible for political and economic success and failure of states. They assert that geography, climate, culture, religion, or economic policies or other explanations are either insufficient or defective (Acemoglu & Robinson, 2012). To illustrate, the U.S. experienced political stability after 1865 when political institutions controlled economic institutions, competition among financial institutions, citizens kept politicians in check, and education provide opportunities to become wealthy. On the contrary, Mexico underwent dictatorships and small elites ruled for their own benefit, which led to instability and rise of monopoly power and lack of finance and education (Acemoglu & Robinson, 2012). The impact of the institutions leads to…

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