of historical case studies to illustrate its points.

The central contention of the book is that the key reason behind why a nation succeeds or why a nation fails is its adoption of democracy. Nations who adopt democracy are able to more easily become an economic and financial driver, while nations who adopt dictatorships fall into economic ruin. The reasoning here is that a democracy helps solidify the laws surrounding property ownership and empowers its citizens to become resourceful and entrepreneurial. On the other hand, the fiscal power is concentrated within the elite in a dictatorship, and only the elite are encouraged to participate in commerce.

The major critique of the book is around China, which has stayed a dictatorship, but has also become a major economic powerhouse. One could argue that China’s economic prowess may be overstated as it participates in currency manipulation versus true measures of economic importance. One could also look at the disparity between the wealth of those connected to the government and the middle-class Chinese citizens.

Why Nations Fail attempts to explain the wide gap between impoverished and affluent nations. This gap is much wider today than in previous historical eras. Nogales, a city that straddles the American-Mexican border, is put forth as an example of this economic discrepancy. Why Nations Fail, written by two eminent professors, can be read by both academics and laymen.

The central thesis of the book is that the nature of political institutions determines the level of economic prosperity of a country. Specifically, nations have either inclusive or extractive institutions. The former are found in democratic societies, and the latter, in authoritarian ones. An example of this is the case of North Korea and South Korea. The elite's interests prevail in North Korea and other countries with extractive institutions. Only fear of a revolution induces autocrats to evolve into a nation that allows inclusive institutions.

Even though Why Nations Fail has been widely praised, some reviewers have made critical observations of it. One potential counterpoint to the book is the rise of China in spite of its failure to reform politically. The authors contend that China's economy will stagnate because of its lack of inclusive institutions, but they do not adequately explain its phenomenal economic growth in recent decades. Another criticism is that inclusive and extractive institutions are vague in different historical eras, making comparisons difficult. These criticisms do not diminish what is a first-rate book, however.