The cycle of extractive institutions perpetuates poverty from "summary" of Why Nations Fail by Daron Acemoglu,James A. Robinson
The vicious cycle of extractive institutions perpetuating poverty is a central theme in understanding why some nations fail to achieve economic prosperity. This concept highlights how institutions that concentrate power and wealth in the hands of a few elites hinder the development of inclusive economic and political systems that benefit the broader population.
The cycle begins with extractive institutions that are designed to benefit a small ruling elite at the expense of the majority. These institutions often involve monopolies, corruption, and restrictions on political and economic freedoms that limit opportunities for social mobility and economic growth. As a result, the majority of the population is excluded from participating in the economy and is unable to improve their living standards.
The perpetuation of extractive institutions is fueled by the incentives of those in power to maintain the status quo. Elites who benefit from extractive institutions have a strong interest in preserving their wealth and power, even if it means perpetuating poverty among the broad...
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