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Extractive economic institutions hinder economic development from "summary" of Why Nations Fail by Daron Acemoglu,James A. Robinson
Extractive economic institutions are characterized by a few individuals or groups who hold power and use it to extract resources from the rest of society, rather than encouraging productive activities. These institutions create a negative cycle where political power is concentrated in the hands of a few, who then use this power to maintain their control over economic resources. This results in limited economic opportunities for the majority of the population, as resources are not allocated efficiently or equitably. The extractive nature of these institutions stifles innovation and entrepreneurship, as individuals are discouraged from investing in new ideas or businesses due to the high levels of corruption, lack of property rights, and unstable legal systems. Without a level playing field, where individuals can trust that their investments will be protected and rewarded, economic development is sev...
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