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Link	Quote	Stars	Tags	Author
0edc79d	The reason that Nogales, Arizona, is much richer than Nogales, Sonora, is simple; it is because of the very different institutions on the two sides of the border, which create very different incentives for the inhabitants of Nogales, Arizona, versus Nogales, Sonora.			Daron Acemoğlu
4f6e129	Cuando el Estado no logra practicamente ninguna centralizacion politica, la sociedad, tarde o temprano, llega al caos,			Daron Acemoğlu
aa7f8e7	economist Abba Lerner noted in the 1970s, "Economics has gained the title Queen of the Social Sciences by choosing solved political problems as its domain."			Daron Acemoğlu
ffecd08	Inclusive economic institutions are in turn supported by, and support, inclusive political institutions, that is, those that distribute political power widely in a pluralistic manner and are able to achieve some amount of political centralization so as to establish law and order, the foundations of secure property rights, and an inclusive market economy. Similarly, extractive economic institutions are synergistically linked to extractive po..			Daron Acemoğlu
f80f410	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 innovation cannot be decoupled from creative destruction, which replaces the old with the new in the economic realm and also destabilizes established power relations in politics. Because elites dominating extractive institutions fear creative destruction, they will resis..			Daron Acemoğlu
9ac2936	As we will show, poor countries are poor because those who have power make choices that create poverty. They get it wrong not by mistake or ignorance but on purpose.			Daron Acemoğlu
c7afd14	el obstaculo principal para la adopcion de politicas que reducirian los fallos del mercado y fomentarian el crecimiento economico no es la ignorancia de los politicos, sino los incentivos y los limites a los que se enfrentan desde las instituciones politicas y economicas de sus sociedades.			Daron Acemoğlu
47b0481	In North Korea, the state built an education system to inculcate propaganda, but was unable to prevent famine. In colonial Latin America, the state focused on coercing indigenous peoples. In neither type of society was there a level playing field or an unbiased legal system. In North Korea, the legal system is an arm of the ruling Communist Party, and in Latin America it was a tool of discrimination against the mass of people. We call such ..			Daron Acemoğlu
bd0df93	Tradicionalmente, la economia ha ignorado la politica, pero la comprension de la politica resulta esencial para explicar la desigualdad del mundo.			Daron Acemoğlu
7e4ba8e	The process of economic growth and the inclusive institutions upon which it is based create losers as well as winners in the political arena and in the economic marketplace. Fear of creative destruction is often at the root of the opposition to inclusive economic and political institutions.			Daron Acemoğlu
56cefed	the secret ballot was introduced and moves were made to eliminate corrupt electoral practices such as "treating" (essentially buying votes in exchange for which the voter received a treat, usually money, food, or alcohol). The" --			Daron Acemoğlu
f68d83d	according to some accounts Smith's life was saved only at the intervention of Wahunsunacock's young daughter Pocahontas.			Daron Acemoğlu
ff40114	In 1856 the state of Victoria, which had been carved out of New South Wales in 1851, and the state of Tasmania would become the first places in the world to introduce an effective secret ballot in elections, which stopped vote buying and coercion. Today we still call the standard method of achieving secrecy in voting in elections the Australian ballot.			Daron Acemoğlu
ecffeb9	Technological change is only one of the engines of prosperity, but it is perhaps the most critical one.			Daron Acemoğlu
e1d7710	Breaking another mold: Rosa Parks challenges extractive institutions in the U.S. south The Granger Collection, NY			Daron Acemoğlu
373201c	The so-called ancien regime prided itself on its continuity and stability. Entry by entrepreneurs and talented individuals into new occupations would create instability and was not tolerated. If			Daron Acemoğlu
f88443e	Dutch governor of Batavia, Jan Pieterszoon Coen, came up with an alternative plan. Coen founded Batavia, on the island of Java, as the Dutch East India Company's new capital in 1618. In 1621 he sailed to Banda with a fleet and proceeded to massacre almost the entire population of the islands, probably about fifteen thousand people.			Daron Acemoğlu
7e2fb8c	The rebirth of China came with a significant move away from one of the most extractive set of economic institutions and toward more inclusive ones. Market incentives in agriculture and industry, then followed by foreign investment and technology, would set China on a path to rapid economic growth. As we will discuss further in the next chapter, this was growth under extractive political institutions, even if they were not as repressive as t..			Daron Acemoğlu
89f8667	On the eve of the French Revolution in 1789, there were severe restrictions placed on Jews throughout Europe. In the German city of Frankfurt, for example, their lives were regulated by orders set out in a statute dating from the Middle Ages. There			Daron Acemoğlu
9f39928	Until 1726 they had to wear specific markers, two concentric yellow rings for men and a striped veil for women. All Jews had to pay a special poll tax.			Daron Acemoğlu
1012008	1791 the French National Assembly emancipated French Jewry. The			Daron Acemoğlu
449a66a	In fact, Egypt is poor precisely because it has been ruled by a narrow elite that have organized society for their own benefit at the expense of the vast mass of people.			Daron Acemoğlu
39dc95a	Slavery and the slave trade in Africa further disrupted family and marriage structures and may also have reduced fertility.			Daron Acemoğlu
aac28a1	Growth thus moves forward only if not blocked by the economic losers who anticipate that their economic privileges will be lost and by the political losers who fear that their political power will be eroded.			Daron Acemoğlu
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
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
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..		markets monopolies	Daron Acemoğlu
32496ce	The most important lesson is that extractive institutions cannot generate sustained technological change for two reasons: the lack of economic incentives and resistance by the elites. In addition, once all the very inefficiently used resources had been reallocated to industry, there were few economic gains to be had by fiat. Then the Soviet system hit a roadblock, with lack of innovation and poor economic incentives preventing any further p..			Daron Acemoğlu
e6db904	A whole set of laws created criminal offenses for workers who were perceived to be shirking. In June 1940, for example, a law made absenteeism, defined as any twenty minutes unauthorized absence or even idling on the job, a criminal offense that could be punished by six months' hard labor and a 25 percent cut in pay. All sorts of similar punishments were introduced, and were implemented with astonishing frequency. Between 1940 and 1955, 36 ..			Daron Acemoğlu
7bb1307	About 15,000 BC, the Ice Age came to an end as the Earth's climate warmed up. Evidence from the Greenland ice cores suggests that average temperatures rose by as much as fifteen degrees Celsius in a short span of time. This warming seems to have coincided with rapid increases in human populations as the global warming led to expanding animal populations and much greater availability of wild plants and foods. This process was put into rapid ..			Daron Acemoğlu

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