To answer—in fact, even to reason about—these
questions, we need a theory of why some nations are
prosperous while others fail and are poor. This theory
needs to delineate both the factors that create and retard
prosperity and their historical origins. This book has
proposed such a theory. Any complex social phenomenon,
such as the origins of the different economic and political
trajectories of hundreds of polities around the world, likely
has a multitude of causes, making most social scientists
shun monocausal, simple, and broadly applicable theories
and instead seek different explanations for seemingly
similar outcomes emerging in different times and areas.
Instead we’ve offered a simple theory and used it to explain
the main contours of economic and political development
around the world since the Neolithic Revolution. Our choice
was motivated not by a naïve belief that such a theory could
explain everything, but by the belief that a theory should
enable us to focus on the parallels, sometimes at the
expense of abstracting from many interesting details. A
successful theory, then, does not faithfully reproduce
details, but provides a useful and empirically well-grounded
explanation for a range of processes while also clarifying
the main forces at work.
Our theory has attempted to achieve this by operating on
two levels. The first is the distinction between extractive and
inclusive economic and political institutions. The second is
our explanation for why inclusive institutions emerged in
some parts of the world and not in others. While the first
level of our theory is about an institutional interpretation of
history, the second level is about how history has shaped
institutional trajectories of nations.
Central to our theory is the link between inclusive
economic and political institutions and prosperity. Inclusive
economic institutions that enforce property rights, create a
level playing field, and encourage investments in new
technologies and skills are more conducive to economic
growth than extractive economic institutions that are
structured to extract resources from the many by the few
and that fail to protect property rights or provide incentives
for economic activity. Inclusive economic institutions are in
turn supported by, and support, inclusive political
institutions, that is, those that distribute political power