Why do some nations succeed and some fail? Economics Nobel Prize winner James A. Robinson has spent his career trying to answer that question. DW's Janelle Dumalaon sat down with him to find out more.
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00:00Why do some nations succeed and some fail?
00:09Economics Nobel Prize winner James A. Robinson has spent his career trying to answer that
00:13question.
00:14I spoke to him at his home in Chicago to find out more.
00:18Congratulations on having won the Nobel Prize for Economics.
00:21At the risk of being, I don't know, the one billionth person to have asked you, how do
00:25you feel?
00:26I was a little shell-shocked for the first few days, actually, I have to say.
00:31It was a sort of out-of-body experience.
00:33I wasn't really thinking about it.
00:37But obviously it's kind of marvelous.
00:41What's been so nice is just talking to so many students and colleagues and like so many
00:46other people, kind of happy, seeing other people happy about, not about me, but about
00:52the ideas and about the research.
00:55So that's been very rewarding, I have to say.
00:59Now to someone who might not be familiar with your work, how would you explain what you've
01:04been doing and what got you the prize, sort of this relationship between colonial strategies
01:09and how institutions developed and economic prosperity?
01:13We were fundamentally, you know, 30 years ago, we were fundamentally interested in understanding
01:17these massive differences in prosperity around the world.
01:21And we thought that economists were just not thinking about this in the right way and
01:26they weren't kind of using the right concepts to think about this.
01:30So the main idea that we developed is that this is really related to the institutions
01:36of different societies and how people themselves kind of organize their societies.
01:41And by institutions, I just mean the rules that create incentives and opportunities for
01:45people.
01:47And if you look around the world, you see these huge differences in these institutions.
01:51But where did those differences come from?
01:53And then to us, just talking about it, this wasn't anything that economists talked about
01:5830 years ago.
02:00Colonialism obviously had to have a big, had to be a big part of that story.
02:04You know, many of these societies were shaped profoundly by colonialism.
02:08So then we started investigating the role of colonialism in creating institutional variation
02:14in the world historically and the extent to which that really accounted for these differences
02:19in prosperity today.
02:21You talk about the difference between inclusive and extractive institutions.
02:26Inclusive institutions having set up nations more for success than extractive ones have.
02:31What is the difference?
02:32Yeah, so that's a dichotomy.
02:35It's sort of simplistic.
02:36Obviously, the world is full of shades of gray, but it's very useful for sort of understanding
02:40the kind of approach that we say inclusive institutions are institutions that create
02:45broad-based incentives and opportunities for people.
02:49And extractive institutions concentrate incentives and opportunities in the hands of a few people.
02:56And so that's crucial for prosperity because what drives economic growth and economic development
03:02is innovation.
03:04It's people's creativity and talents and, you know, you don't know where that is.
03:09You don't know where those people are in society.
03:11You don't know where the innovators are, where the entrepreneurs are.
03:14And so you need to create a set of institutions that allows all that talent to come to the top.
03:21But we also currently have this ongoing competition in Latin America, in Asia, in Africa.
03:28You have countries like the U.S., Russia, and China sort of jockeying for influence
03:33in these places.
03:34How do you apply your theory to that phenomenon?
03:38You know, the way our theory works is there are moments in world history where, you know,
03:43whole continents get reshaped by colonialism or these sort of global forces.
03:48And then we put a lot of emphasis on the kind of internal dynamics, internal political dynamics
03:54of societies.
03:55You know, we're often accused of not having a really good, well-articulated theory of
03:59international relations.
04:01You know, the way I look at it, you know, which comes a lot from my experience of working
04:06in the global south, is that, you know, many people still see, you know, the United States
04:12or the Western powers as colonizers.
04:14You know, like, Western powers come, they tell you what to do, you know, they kind of,
04:19you know, they boss you about.
04:20They say, if you do this and that, we'll give you money.
04:23You know, what you should really do is, like, be more like us, you know.
04:27And that's very annoying for people in the global south, I would say, you know.
04:33And I'm not sure it's such a bad thing if there was a rebalancing of that, you know.
04:38So I think the rise of China, of course, has created a sort of idea that, you know,
04:43there's going to be a different world system.
04:44I'm not quite sure that's actually going to happen, because, you know, my own view about
04:49Chinese economic growth is, you can't actually have a modern, innovative economy under a
04:53totalitarian dictatorship.
04:55There's no precedent for that in world history.
04:57And I think you see lots of mechanisms for why that's not going to happen.
05:00Look at Jack Ma.
05:01You know, Jack Ma, you know, one of the symbols of Chinese economic success.
05:05What happened to him?
05:06He was cancelled.
05:08He disappeared because he criticized the government.
05:09You can't have a society like that.
05:11You can't have a modern, innovative society like that.
05:14So I don't think the Chinese really have the political foundations to be economically successful.
05:19So of course, the scale of China is so impressive that, you know, it's difficult not to be carried
05:24away by it.
05:26But I'm old enough to remember when the Soviet Union was an economic success story.
05:30You know, we learned when we were at school, high school, university, Russia was going
05:36to be the future.
05:37You know, now you tell young people that they don't know what you're talking about.
05:40You know, there's nothing left in Russia except natural resources.
05:44But I think, you know, we point out in the book there's many experiences in world history
05:48like China where you have, you know, periods of very rapid economic growth in particular
05:53circumstances, you know, but you can't extrapolate that into the future.
05:58You know, we call it extractive growth.
06:00So that means, you know, I think it would probably be a good thing to rebalance the
06:04world system, you know, to stop this hegemony of Western powers in international institutions
06:10and everywhere.
06:12But I'm not sure it's going to happen, actually.
06:15Taking your definition of institutions being a set of rules and incentives, how would you
06:20rate the institutions of the United States today?
06:24Well, you know, I still see, you know, there's huge elements of inclusion, you know, in the
06:29sense that United States, you know, for me the biggest edge in, you know, economic edge
06:34the United States has had for the last 200 years is this ability to suck talent out of
06:40the rest of the world.
06:41You know, think about Elon Musk, where did Elon Musk, where was Elon Musk born?
06:45South Africa.
06:46You know, Steve Jobs.
06:47Where did Steve Jobs' father's family come from?
06:49Syria.
06:50You know, Sergey Bin.
06:51Where's he from?
06:52Russia.
06:53You know, like, so that's still going on, you know.
06:55So that's still going on.
06:56Obviously, look at all this innovation in AI and, you know, digital, you know, so that
07:02kind of machine is still going there.
07:04But I think what you've seen in the United States, and of course, you know, much of the
07:08other stuff is there too, the long shadow of slavery, you know, and discrimination and
07:13racism in this country, the marginalization of indigenous people, that's all there too,
07:19you know.
07:20So, but I think what you've seen in the last 50 years is this is all coming off the rails
07:24in many ways.
07:25You know, that most Americans are not better off now than they were 50 years ago.
07:30That's a fact.
07:31You know, social mobility has slowed down dramatically.
07:35There's been a massive increase in inequality, you know.
07:39So that's challenging all the institutions today.
07:41Look, you know, probably next week we're going to elect a president who doesn't respect institutions,
07:47who basically tried to fix the last election in his own favor.
07:51So that's a massive challenge to inclusive institutions in this country.
07:56But you know, the way I think about that is that's because of the failures of the system,
08:01you know, that the system, the democratic system has failed to adapt to globalization,
08:07to technical change.
08:08It's failed to kind of listen to people's problems, you know.
08:12I do think in Why Nations Fail, what we show is that, you know, the U.S. institutions have
08:16been challenged many times.
08:17You know, if you look historically, you see in the 19th century, these robber barons,
08:22Vanderbilt, Rockefeller, you know, they definitely challenged institutions.
08:27They tried to undermine the political system, you know.
08:30But the system managed to fight back.
08:32People managed to fight back.
08:34And I think at the moment, we don't know if that's going to happen.
08:38You know, we're in the middle of a kind of very historic moment.
08:41I think in the past, you know, we show there are many moments like this.
08:45But somehow the system has come back on the rails.
08:49Will it come back on the rails now?
08:50I don't know.
08:51You know, we also talk about many examples where inclusive institutions and inclusive
08:55societies became more extractive.
08:57You know, Venice is our sort of leading example.
09:00Venice was probably the richest part of the world in the late Middle Ages.
09:04And then everything went into reverse.
09:06You know, all the inclusion in the economic sphere and the political sphere.
09:09So could that happen here?
09:10Yes, of course it could happen here.
09:12When you see Donald Trump, and he could very well be the next president of the United States,
09:18you talk a lot about the importance of institutions.
09:20And this is someone whose supposed agenda is to remake government, is to overhaul institutions.
09:27What do you think will happen if all this comes to pass?
09:30Like, what does that say about the fortunes of this country?
09:34Well, I don't think President Trump is in favor of changing institutions.
09:38I think he's in favor of destroying and personalizing institutions, actually.
09:42I think it's an impulse you see all over Latin America.
09:44It's been going on in Mexico for the last few years.
09:47You know, it's a very common sort of scenario.
09:50So I think, you know, he'd like to undermine institutions.
09:54And he doesn't like institutions.
09:55He wants to personalize everything.
09:57He wants to make everything discretionary.
09:59And so I think that's going to be a disaster for this country, honestly.
10:03It's going to be a calamity.
10:05You know, can we survive that for four years?
10:08I don't know.
10:09Federalism, you know, helped us last time.
10:10It saved us last time.
10:12He tried to interfere with the counting of votes.
10:14But he couldn't really do that because the federal government can't really do that, you
10:18know.
10:19So the federalism is very important, you know.
10:22And you know, if you go back to the founding of the United States and the writing of the
10:26Constitution, James Madison, these people understood this.
10:29You know, the Constitution wasn't designed for, like, Barack Obama, you know, like some
10:33really nice person.
10:35Well, the Constitution was designed for somebody who wanted to destroy it, you know.
10:39That's why there are these checks and balances.
10:41That's why there are these separations of powers.
10:43That's why there's federalism, you know, because of people like this.
10:48And that's happened before, as I said.
10:49And we survived.
10:50Are we going to survive it now?
10:51You know, I was impressed when President Trump was sort of removed from power by people's
10:57willingness to kind of act in favor of the country's welfare, even when their own jobs
11:04and livelihoods were on the line.
11:05You know, people were willing to kind of work with the institutions and to support
11:11them and believe in them.
11:12And I think that's what we're relying on now.
11:14You know, already they're burning ballot boxes, you know.
11:16So people are—whatever happens, you know, if President Trump loses, he's never going
11:20to accept the result.
11:21And then I think, you know, many people are concerned about violence and sort of political
11:25instability.
11:26And, you know, we also—what we don't know, I think, is what's really happened to the
11:32Republican Party.
11:33You know, like, I'm emphasizing we're talking about President Trump.
11:36But I first of all started talking about the social problems in this country.
11:39You know, let's not forget the social problems.
11:42That's why President Trump is so powerful, that he understood that these people felt
11:47that they were not being listened to and not represented in the political system.
11:52And you know, he was clever enough to understand that.
11:54The Democratic Party didn't understand it.
11:56So those problems, you know, if those problems don't go away, this type of politics may not
12:02go away.
12:03So you need to step up to the plate, you know.
12:06And you're not going to step up to the plate if you're complacent and don't recognize the
12:09challenges.
12:10Thank you very much, Professor James Robinson.