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Link	Quote	Stars	Tags	Author
a362217	Pluralism also creates a more open system and allows independent media to flourish, making it easier for groups that have an interest in the continuation of inclusive institutions to become aware and organize against threats to these institutions. It is highly significant that the English state stopped censoring the media after 1688. The media played a similarly important role in empowering the population at large and in the continuation of..			Daron Acemoğlu
93c679f	Many citizens in Rome did not need to work: they lived off the handouts from the government.			Daron Acemoğlu
ae2c7d4	Though the early growth in Botswana relied on meat exports, things changed dramatically when diamonds were discovered. The management of natural resources in Botswana also differed markedly from that in other African nations. During the colonial period, the Tswana chiefs had attempted to block prospecting for minerals in Bechuanaland because they knew that if Europeans discovered precious metals or stones, their autonomy would be over. The ..			Daron Acemoğlu
5912148	Federal intervention to change the institutions in the South started with the decision of the Supreme Court in 1944 that primary elections where only white people could stand were unconstitutional. As we have seen, blacks had been politically disenfranchised in the 1890s with the use of poll taxes and literacy tests (pages 351-357). These tests were routinely manipulated to discriminate against black people, while still allowing poor and il..			Daron Acemoğlu
a65f943	every elite would, all else being equal, like to encourage as much growth as possible in order to have more to extract. Extractive institutions that have achieved at least a minimal degree of political centralization are often able to generate some amount of growth. What is crucial, however, is that growth under extractive institutions will not be sustained, for two key reasons. First, sustained economic growth requires innovation, and inno..			Daron Acemoğlu
565d65d	in 1500 standards of living were probably at least as high in China as they were in Europe.			Daron Acemoğlu
1445e44	The records of a relatively small bank, C. Hoare's & Co. in London, which have survived intact from the period 1702-1724, illustrate this point. Though the bank did lend money to aristocrats and lords, fully two-thirds of the biggest borrowers from Hoare's over this period were not from the privileged social classes.			Daron Acemoğlu
5a52898	In Egypt, for instance, the first printing press was set up only in 1798, by Frenchmen who were part of the abortive attempt by Napoleon Bonaparte to capture the country.			Daron Acemoğlu
3ef278f	The English textile industry not only was the driving force behind the Industrial Revolution but also revolutionized the world economy.			Daron Acemoğlu
8518c3f	English exports, led by cotton textiles, doubled between 1780 and 1800. It was the growth in this sector that pulled ahead the whole economy. The combination of technological and organizational innovation provides the model for economic progress that transformed the economies of the world that became rich.			Daron Acemoğlu
87cc923	To be inclusive, economic institutions must feature secure private property, an unbiased system of law, and a provision of public services that provides a level playing field in which people can exchange and contract; it also must permit the entry of new businesses and allow people to choose their careers.			Daron Acemoğlu
e8cbf9a	these densely settled civilizations interacted in a perverse way with European colonialism to create a "reversal of fortune," making the places that were previously relatively wealthy in the Americas relatively poor. Today it is the United States and Canada, which were then far behind the complex civilizations in Mexico, Peru, and Bolivia, that are much richer than the rest of the Americas."			Daron Acemoğlu
4f47eba	Now imagine a different society, for example the Congo or Haiti, where a large fraction of the population has no means of attending school, or where, if they manage to go to school, the quality of teaching is lamentable, where teachers do not show up for work, and even if they do, there may not be any books.			Daron Acemoğlu
7e560fa	Japan and Singapore never had more than a sprinkling of inhabitants of European descent, yet they are as prosperous as many parts of Western Europe.			Daron Acemoğlu
04bc045	For example, a merchant in a colony such as New Spain, roughly modern Mexico, could not trade directly with anyone in New Granada, modern Colombia. These restrictions on trade within the Spanish Empire reduced its economic prosperity and also, indirectly, the potential benefits that Spain could have gained by trading with another, more prosperous empire.			Daron Acemoğlu
d8f09d7	revolution that overthrew Mubarak will lead to a new set of institutions capable of bringing prosperity			Daron Acemoğlu
a2e57df	even if industry itself was very inefficiently organized relative to what could have been achieved. In fact, between 1928 and 1960 national income grew at 6 percent a year, probably the most rapid spurt of economic growth in history up until then.			Daron Acemoğlu
455fd6d	in which the Soviets did manage to sustain some innovation was through enormous efforts in military and aerospace technology. As a result they managed to put the first dog, Leika, and the first man, Yuri Gagarin, in space. They also left the world the AK-47 as one of their legacies.			Daron Acemoğlu
1c4383d	selling patents was a good idea only for someone like Edison, who had ideas faster than he could put them to practice. (He had a world-record 1,093 patents issued to him in the United States and 1,500 worldwide.)			Daron Acemoğlu
491b7da	after 1688 the state began to rely more on talent and less on political appointees, and developed a powerful infrastructure to run the country.			Daron Acemoğlu
a7f4f77	Fruits of unsustainable extractive growth: Zheng He's ship alongside Columbus's Santa Maria Gregory A. Harlin/National Geographic Stock			Daron Acemoğlu
735637f	Noha Hamed, twenty-four, a worker at an advertising agency in Cairo, made her views clear as she demonstrated in Tahrir Square: "We are suffering from corruption, oppression and bad education."			Daron Acemoğlu
ca595ae	model broke down,			Daron Acemoğlu
9c60849	but it also meant that there were checks within Parliament against any single group becoming too powerful and abusing its power. It was the critical factor in the emergence of pluralistic political institutions.			Daron Acemoğlu
bd8a01d	If these rulers would only get the right advice from the right advisers, the thinking goes, prosperity would follow.			Daron Acemoğlu
7cdbf23	Absolutism and a lack of, or weak, political centralization are two different barriers to the spread of industry. But they are also connected; both are kept in place by fear of creative destruction and because the process of political centralization often creates a tendency toward absolutism. Resistance to political centralization is motivated by reasons similar to resistance to inclusive political institutions: fear of losing political pow..			Daron Acemoğlu
48bce4e	The people who suffer from the extractive economic institutions cannot hope for absolutist rulers to voluntarily change political institutions and redistribute power in society. The only way to change these political institutions is to force the elite to create more pluralistic institutions.			Daron Acemoğlu
3a017e4	Technological innovation makes human societies prosperous, but also involves the replacement of the old with the new, and the destruction of the economic privileges and political power of certain people.			Daron Acemoğlu
2c3d642	We'll see that the reason that Britain is richer than Egypt is because in 1688, Britain (or England, to be exact) had a revolution that transformed the politics and thus the economics of the nation. People fought for and won more political rights, and they used them to expand their economic opportunities. The result was a fundamentally different political and economic trajectory, culminating in the Industrial Revolution.			Daron Acemoğlu
02662dd	Under the Song dynasty, between 960 and 1279, China led the world in many technological innovatons. The Chinese invented clocks, the compass, gunpowder, paper and paper money, porcelein and the blast furnaces to make cast iron before Europe did. They independently developed spinning wheels and waterpower at more or less the same time that these merged at the other end of Eurosia.			Daron Acemoğlu
a5b7573	While part of the appeal of authoritarian growth comes as a reaction to the Washington consensus, perhaps its greater charm--certainly to the rulers presiding over extractive institutions--is that it gives them free rein in maintaining and even strengthening their hold on power and legitimizes their extraction.			Daron Acemoğlu
5b769d4	But all this does not imply that foreign aid, except the humanitarian kind, should cease. Putting an end to foreign aid is impractical and would likely lead to additional human suffering. It is impractical because citizens of many Western nations feel guilt and unease about the economic and humanitarian disasters around the world, and foreign aid makes them believe that something is being done to combat the problems. Even if this something ..			Daron Acemoğlu
debdf6a	How to win lottery in Zimbabwe It was January 2000 in Harare, Zimbabwe. Master of Ceremonies Fallot Chawawa was in charge of drawing the winning ticket for the national lottery organized by a party state-owned bank, the Zimbabwe Banking Corporation (Zimbank). The lottery was open to all clients who had kept five thousand or more Zimbabwe dollars in their accounts during December 1999. When Chiwawa drew the ticket, he was dumbfounded. As t..			Daron Acemoğlu
8d9a168	THE SOVIET UNION was able to generate rapid growth even under extractive institutions because the Bolsheviks built a powerful centralized state and used it to allocate resources toward industry.			Daron Acemoğlu
9231b45	growth under extractive institutions is limited not only because of lack of technological progress but also because it will encourage infighting from rival groups wishing to take control of the state and the extraction it generates.			Daron Acemoğlu
fe048e4	Creating banking monopolies and giving loans to politicians is good business for politicians, if they can get away with it. It is not particularly good for the citizens, however.			Daron Acemoğlu
309284f	We have to understand why the politics of some societies lead to inclusive institutions that foster economic growth, while the politics of the vast majority of societies throughout history has led, and still leads today, to extractive institutions that hamper economic growth.			Daron Acemoğlu
a022008	Extractive institutions are so common in history because they have a powerful logic: they can generate some limited prosperity while at the same time distributing it into the hands of a small elite. For this growth to happen, there must be political centralization. Once this is in place, the state--or the elite controlling the state--typically has incentives to invest and generate wealth, encourage others to invest so that the state can ext..			Daron Acemoğlu
7a89f17	The growth generated by extractive institutions is very different in nature from growth created under inclusive institutions, however. Most important, it is not sustainable. By their very nature, extractive institutions do not foster creative destruction and generate at best only a limited amount of technological progress. The growth they engender thus lasts for only so long. The Soviet experience gives a vivid illustration of this limit.			Daron Acemoğlu
ef28ff8	Allowing people to make their own decisions via markets is the best way for a society to efficiently use its resources. When the state or a narrow elite controls all these resources instead, neither the right incentives will be created nor will there be an efficient allocation of the skills and talents of people.			Daron Acemoğlu
072bcde	Nations fail economically because of extractive institutions. These institutions keep poor countries poor and prevent them from embarking on a path to economic growth. This is true today in Africa, in places such as Zimbabwe and Sierra Leone; in South America, in countries such as Colombia and Argentina; in Asia, in countries such as North Korea and Uzbekistan; and in the Middle East, in nations such as Egypt. There are notable differences ..			Daron Acemoğlu
a85bb13	There are two important lessons here. First, foreign aid is not a very effective means of dealing with the failure of nations around the world today. Far from it. Countries need inclusive economic and political institutions to break out of the cycle of poverty. Foreign aid can typically do little in this respect, and certainly not with the way that it is currently organized. Recognizing the roots of world inequality and poverty is important..			Daron Acemoğlu
a269117	A broad coalition meant that there would be greater demands for the creation of pluralist political institutions. Without some sort of pluralism, there would be a danger that one of the diverse interests would usurp power at the expense of the rest.			Daron Acemoğlu
0738edf	The rise of Robber Barons and their monopoly trusts in the late nineteenth and early twentieth centuries underscores that, as we already emphasized in chapter 3, the presence of markets is not by itself a guarantee of inclusive institutions. Markets can be dominated by a few firms, charging exorbitant prices and blocking the entry of more efficient rivals and new technologies. Markets, left to their own devices, can cease to be inclusive, b..		monopolies markets	Daron Acemoğlu

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