This year’s Nobel Prize in Economics (certainly not for metaphysics, and we’ll see later why the author again perfidiously uses a cheap clickbait trick) was awarded to Daron Acemoglu and Simon Johnson from Massachusetts Institute of Technology and James Robinson from University of Chicago. They received the award for research on how and why institutions shape states and their prosperity, and crucially influence whether and how countries and nations will successfully develop or fail.
The comprehensive and in-depth research of these eminent scientists, enormous amounts of data, and theoretical foundation based precisely on them, covering a timespan from colonial conquests to the present, enabled them to offer an explanation based on the crucial importance of institutions for state development. They identify two types of institutions: extractive and inclusive.
It is precisely inclusive institutions, which enable participation and development of democracy, that are key to the success and development of states, while extractive ones actually cement authoritarian regimes and allow a narrow circle of elites to amass enormous wealth, while keeping the broadest layer of population disenfranchised and in poverty. Even at the level of elementary logic, such a thesis makes sense, meaning that countries which developed inclusive institutions through their development, protecting property rights and enabling fairer resource distribution, were inevitably on the path to long-term prosperity, while those countries and their resources that were under the control of a narrow circle of elites enabled short-term benefits for the few at the top and their enormously privileged status, while keeping the majority of the population in a subordinate position.
Of course, many factors and variables influenced each individual case of each country’s development, in an infinitely complex interaction and conditioning of different processes and factors, but such a general hypothesis, as we said, makes a lot of sense. Naturally, each individual case is unique, in these webs of historical circumstances, geography, nature, and cultural factors played their roles, often including coincidences and who knows what else.
Hence the clickbait title, because the question of why and how some states and nations successfully develop while others fail is a question that transcends economic science, delves deep into political science, and even philosophy, and long-standing academic debates on these topics make it a metaphysical question precisely because of its complexity.
Of course, as always and in everything, the work of this year’s Nobel Prize laureates has provoked quite a few, more or less coherent and justified criticisms. From claims that their work isn’t necessarily too original, to accusations that it oversimplifies extremely complex matter which, as we said, far exceeds and transcends the domain of economic science. Certainly, we won’t delve into the minutiae and justification of such criticisms here, but rather invite all readership to embark on the reading adventure of their most prominent works and form their own judgment. These certainly include “Why Nations Fail,” then “The Narrow Corridor: States, Societies, and the Fate of Liberty” by Dr. Acemoglu and Dr. Robinson, as well as “Power and Progress,” authored by Dr. Acemoglu and Dr. Johnson, among many others.
This is certainly an opportunity to reflect on ourselves and our current position and development perspectives. Undoubtedly, we fall into the category of countries that still have extractive type institutions, or institutions that work exclusively for the purpose and interest of a narrow handful of authoritarian pseudo-elite in power.
The EU accession process, which increasingly resembles waiting for Godot, and Godot, as we know from literature, tends to rarely or never appear, doesn’t mean we can remain passive subjects in this process. However well-intentioned the EU may be, it and its member states have their legitimate interests. Those who have doubts about this should look at the increasingly relevant story about lithium and other critical raw materials.
Similarly, no external actor can reform society through external intervention if there is no clear and articulated demand for it from within. At least we in BiH have learned this the hard way; again, those who have doubts should just look at the frenzied and deranged man who presents himself as the High Representative and what he’s doing in our suffering homeland.
The first and fundamental question before us, from the domain of what Brussels EU newspeak calls fundamentals areas, is a question long recognized since Rousseau, which is the question of the basic social contract between those who govern and those who are governed. If those who are governed consent to being governed, then elementary things must be respected even by those who govern – separation of powers, equality before the law, therefore the power even of those in authority must be limited by law. And that’s exactly why we need these inclusive institutions. Without this, we simply cannot move forward as a society.
But we will have to resolve this ourselves, among ourselves, and with or against these ruling strongmen. Sooner or later.
Therefore, read Acemoglu, Johnson, and Robinson, it will be useful to us all.
