Why Nations Fails ?

This article is a short review of book "Why Nations Fail", in relation to Nepalese context.

Meaning of Nation:

Conventional definition of nations identifies it as: A large group of people who share a common territory and government irrespective of their ethnic makeup.

For other:  It  refers to a shared cultural experience, such as Hinduism or Communism, or at one time even Christianity- an organization with no physical borders yet sharing a common bond because of shared beliefs of ethnicity.

Meaning of Failed Nations:

While there is no any consensus about the meaning of the failed nations, Wikipedia defines it as: A state perceived as having failed at some of the basic conditions and responsibilities of a sovereign government. Some of those failed basic conditions and responsibilities might be:  Loss of control of its territory, erosion of legitimate authority to make collective decisions, inability to provide public services, inability to interact with other states as a full member of the international community etc. Such failed states are peculiarly characterized by the presence of: massive level of corruption, central government being too weak to take control of its territory, massive criminality, prolonged economic decline etc.

Though the concept of failed nations is popular these days when we talk about a particular country (in light of the development situation or its political/economic stability), there has been no consensus among thinkers about the what failed nations really means.  We can set the parameters to mark a nation as a failed or not failed. But is it really a justified thought? Can a nation can fail just like an individual person? Nation may get overtaken or subsumed or recede, but rarely do they disappear. However when they pass through prolonged period or crisis resulting from loss of sovereignty because of massive poverty, corruption, political instability, rampant economic disruptions, we may term a nation as a failed one.

Reason behind failing of the nations:

"Why Nations Fall: The Origins of Power, Prosperity and Poverty, Daron Acemoglu and James Robinson" is one of its kind that makes an in-depth analysis of the facts and figures responsible for the failure of the nations. The book is eloquent, profoundly researched and a masterpiece of scholastic analysis of these repeated failures.

The book begins with story of place called Nogales which is cut into half by a fence. On the northern side is Nogales, Arizona-United States. While on the Southern side is Nogales, Mexico. The northern side is characterized by high income, good literacy rate, healthy population, higher life expectancy, a rule of law and democratically sound practices. But in contrast to the northern Nogales, the southern part has low literacy rates, poor health conditions, lower life expectancy, poor public amenities, and a fragile democracy. Both part of Nogales have no differences in geography, climatic conditions, types of diseases prevalent, food habits, cultural background and also they have same ancestors.  So typically none of the above mentioned reasons can be attributed for the cause of difference in prosperity of the two part of the Nogales. However, the writers identify the presence of inclusive political institutions (as a result of democratic economic institutions) the main cause for the prosperous and sound Northern Nogales situated in the United States.

Inclusive political institutions guide the inclusive economic institutions of the country. Inclusive institutions bring together all facets of society in economic generation activities; providing incentives via institutions. These set of institutions encourage technological innovations, flourish education system, enhance knowledge and skills enhancement, etc. They provide people with freedom to pursue the vocations in life that best suits their talents which ultimately ensures the greater welfare of people living in a society. In contrast, extractive economic institutions, which are the byproduct of extractive political institutions (like that of North Korea), are designed to extract wealth from one sector of society to the other subset of society. Such extractive institutions enable the elites controlling the political power to choose economic institutions with few constraints/opposing forces.  They also enable the elites to structure future political institutions as per their convenience. And this cycle goes on.

Where does Nepal stand?

In most of the failed nations, states are structured around extractive political institutions where the institutions serve to satisfy the needs and aspirations of the elites alone. While we see this issue in reference to that of Nepal, we find the evidence of the same and data suggests the same.  Institutions of Nepal are extractive and are basically family dominated. 

In case of Nepal, we can also relate the condition to extractive political situation prevailing here since long period of time.

When we study the political history of Nepal, we can find that the country’s political situation has been turbulent over time.  Though Nepalese have been successful to overthrow one corrupt political system for the other, but still the new system couldn't be installed properly for the broader welfare of its citizens. The paradigm of changes that emerged after such point of time have been contrasting with regard to that in developed countries like United Kingdom and other developed nations. For eg: While if we see the case of United Kingdom, favored by inclusive political and economic institutions, the introduction of Bills of Right of 1689 following the overthrow of King James II developed a breakthrough change which harvested the benefits for the next 250 year and more.

Even after the end of 104 years of extractive political system favoring Rana family, the political system developed thereafter couldn't establish and thus flourish properly. The country has gone through rapid political changes during the last two decades. As such no any democratic system could hold a firm control of the state affairs that would favor their citizens.  And over this period the political conditions revolved same group of elites. Any political and economic systems that were established between these periods couldn't be of significant help to its citizens, in terms of resource mobilization, economic empowerment, employment generation etc.  All the mode of governance was centralized and the state couldn't have firm control over its state affairs. As such the country was heading towards the juncture of failed nations.

 However with the establishment of 2006 April revolution, Nepal has embarked into a journey which has been able to instill a new rays of hope to the country and its citizens. The political system has been set-up in a democratic and inclusive system wherein anyone can fight to hold any significant position in the form of governance. With people from all walks of life being involved in constitution drafting process, we can hope that a well inclusive constitution will provide a way forward for the development of the nation.


(This article has been drafted based on the book "Why Nations Fall: The Origins of Power, Prosperity and Poverty, Daron Acemoglu and James Robinson". The writer has used his own perspective regarding the Nepalese context. Any suggestions and feedbacks are welcomed)