On 29 March 2016, the Rafael del Pino Foundation organised the Keynote Lecture "Why countries fail" given by James Robinson, Professor of Political Economy at the Harris School of Public Policy at the University of Chicago.
A recognised expert on political economy, institutions and economic and political development, Professor Robinson has had an intense and prolific teaching and research career. He trained as an economist at the London School of Economics and Political Science and at Warwick and Yale Universities. Prior to joining the University of Chicago, he held the Wilbur A. Cowett and David Florence Chairs in governance at Harvard University and served as professor of economics and political science at the Universities of California-Berkeley, Southern California, and Melbourne.
Among his numerous works, one of the most important is "Why Nations Fail", which he developed together with Professor Daron Acemoglu, one of the most renowned works on economics, which Nobel Prize-winning economist George Akerlof called "an enduring classic on a par with Adam Smith's The Wealth of Nations".
Summary:
Why do countries fail? James Robinson, Professor of Political Economy at the Harris School of Public Policy at the University of Chicago, offered an answer to this question in a lecture he gave on 29 March at the Rafael del Pino Foundation. According to Robinson, co-author of the book "Why countries fail", successful societies are those that generate productivity. The difference between rich and poor countries is not really one of per capita income, but of productivity. And behind it is the way societies are organised; the rules, the incentive systems and the opportunities that are generated within them. All of which depend on institutions. Bill Gates and Carlos Slim are two of the richest people in the world, but the way they made their fortunes and the impact of their enrichment on American and Mexican societies, respectively, are very different, precisely because of the institutional differences between the two countries. In the United States, there are inclusive institutions that draw people into innovative activities that generate wealth for society as a whole. In Mexico, on the other hand, institutions do not apply the rules and allow the creation of monopolies, such as Slim's, that enrich a few and impoverish the majority, including the state. Behind institutions there is a state, a political system, which creates those institutions. If the institutions that are created are inclusive, that is, they define and defend property rights, countries prosper. If, on the other hand, they are extractive, i.e. they do not define and protect property rights, then countries fail. The former allow the latent talent in societies to be harnessed; the latter do not. From this point of view, poor countries are poor not because they lack capable people, but because the institutional system does not allow them to take advantage of those capabilities. Extractive institutions, moreover, concentrate political power, while inclusive institutions distribute it throughout society. This is how political institutions are shaped. And extractive political institutions give rise to extractive economic institutions, while inclusive ones give rise to inclusive economic ones. The former create poverty; the latter create economic growth and development. There are cases, however, such as China, where extractive political institutions give rise to inclusive economic institutions that generate economic growth. But this situation is unstable and unsustainable over time. As far as Spain is concerned, the country is a very successful example in economic and political terms because it has inclusive institutions. But there are also some extractive ones that establish a nexus between politics, construction companies and financial institutions that explains the crisis.
The Rafael del Pino Foundation is not responsible for the comments, opinions or statements made by the people who participate in its activities and which are expressed as a result of their inalienable right to freedom of expression and under their sole responsibility. The contents included in the summary of this conference, written for the Rafael del Pino Foundation by Professor Emilio González, are the result of the debates held at the meeting held for this purpose at the Foundation and are the responsibility of the authors.
The Rafael del Pino Foundation is not responsible for any comments, opinions or statements made by third parties. In this respect, the FRP is not obliged to monitor the views expressed by such third parties who participate in its activities and which are expressed as a result of their inalienable right to freedom of expression and under their own responsibility. The contents included in the summary of this conference, written for the Rafael del Pino Foundation by Professor Emilio J. González, are the result of the discussions that took place during the conference organised for this purpose at the Foundation and are the sole responsibility of its authors.
