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Inclusive institutions lead to prosperity, while extractive institutions lead to poverty from "summary" of Why Nations Fail by Daron Acemoglu,James A. Robinson
Inclusive institutions are those that create a level playing field for all individuals in society. They provide secure property rights, promote the rule of law, encourage investment in education and innovation, and foster a competitive environment where anyone can succeed based on their merit and hard work. Inclusive institutions incentivize individuals to work hard, take risks, and invest in the future, knowing that they will be able to reap the rewards of their efforts. On the other hand, extractive institutions are designed to benefit a small elite at the expense of the majority of the population. These institutions concentrate power and wealth in the hands of a few, leading to widespread poverty and underdevelopment. Extractive institutions limit economic opportunities for the majority of people, stifling innovation and entrepreneurship. They create a system where success is based on connections, corruption, and exploitation rather than hard work and talent. The contrast between inclusive and extractive institutions can be seen in various aspects of society, such as the legal system, political system, economic system, and social norms. Inclusive institutions ensure that everyone has access to justice, equal rights, and opportunities for social mobility. They promote democracy, accountability, and transparency in government, fostering trust between citizens and the state. Inclusive institutions also encourage free markets, c...
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