WHY NATIONS FAIL By Daron Acemoglu and James A. Robinson (CHAPTER 3)

 

THE MAKING OF PROSPERITY AND POWER

THE ECONOMICS OF THE 38^TH PARALLEL

Chapter three starts by telling us how economics in North Korea and South Korea were and the living standards of the citizens of both sides of the 38th parallel, Here discusses the story of two brothers one is in north and other is in south side of Korea, the brother lives in south side his life expectancy is more than his brother live in north Korea. Because in north Korea the citizens have no property rights, political rights and no proper institutions.

The reason of the difference between two parallels is the elite and ruling class of the north don’t want to give power to their citizens to become prosperous and involved in the matters of the states. They just want to rule as this is an example to explain the logic of why economic prosperity is persistently rare under extractive economic and political institutions. After independence, the Congo was not able to develop because of the interests to extract income and sustain the power of the ruling elite and the King. Citizens were impoverished while the elite and the King were becoming continuously wealthy, therefore, supporting extractive economic and political institutions. If they had opted for inclusive economic and political institutions, the King and the elite would have not been as rich and as powerful, which was not on their interest.