According to Daron Acemoglu and James Robinson's seminal book, "Why Nations Fail" (Profile Books Ltd, 2012), nations plagued by "extractive institutions" manipulated by vested interests historically proved to face decline or even collapse. Its conclusion points to the inevitability that Western democracies would win out in the end over autocractic regimes.
My earlier blog here posted a question comparing China and America - "Which superpower is more threatened by its “extractive elites”?
A recent book review by Michele Boldrin, David K. Levine and Salvatore Modica offers more insight into and in-depth analysis of the universality of Acemoglu's conclusions.
Download Book review of Why Nations Fail
For example, both Napoleonic France and Germany before the Second World War registered long periods of success as nations, while some "inclusive" democracies headed towards relative decline. It begs the question whether the answer lies more in institutions favouring innovation and competitiveness, both domestic and international, rather than purely being "inclusive". It also points out that inclusive institutions could equally be plagued by "vested interests" while "extractive" institutions could evolve over time to becoming more "inclusive".
As in a debate between "democracy" and "autocracy", sometimes the truth is muddled by labels. While there is much merit in highlighting the importance of institutions, the jury is still out whether inclusive institutions are the be-all-and-end-all pre-condition to nation's success or survival, as sometimes it is made out to be. More importantly, it begs the question whether more benevolent kinds of "extractive institutions" are indeed the key to driving a nation's resources to build infrastructural capacity at least during certain stages of development of some countries, as in the case of China.
An analysis of the pros and cons of China's One-Party rule can be found here
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