Quotes from Daron AcemoÄŸlu

absolute power corrupts absolutely.

Different patterns of institutions today are deeply rooted in the past because once society gets organized in a particular way, this tends to persist.

Perón, Chávez, and dozens of other strongmen in Latin America are just another facet of the iron law of oligarchy, and as the name suggests, the roots of this iron law lies in the underlying elite-controlled regimes.

Ignorance can explain at best a small part of world inequality.

As such, the usual pattern of interaction between a critical juncture and existing institutional differences leading to further institutional and economic divergence played out again in the nineteenth century, and this time with an even bigger bang and more fundamental effects on the prosperity and poverty of nations.

England did not become a democracy after the Glorious Revolution of 1688. Far from it. Only a small fraction of the population had formal representation, but crucially, she was pluralistic. Once pluralism was enshrined, there was a tendency for the institutions to become more inclusive over time, even if this was a rocky and uncertain process. In

while economic institutions are critical for determining whether a country is poor or prosperous, it is politics and political institutions that determine what economic institutions a country has.

WHAT CAN BE DONE to kick-start or perhaps just facilitate the process of empowerment and thus the development of inclusive political institutions? The honest answer of course is that there is no recipe for building such institutions. Naturally there are some obvious factors that would make the process of empowerment more likely to get off the ground.

Nations fail when they have extractive economics institutions, supported by extractive political institutions that impede and even block economic growth. But this means that the choice of institutions--that is, the politics of institutions--is central to our quest for understanding the reasons for the success and failure of nations.

Since independence, the census in Botswana has never asked about ethnic heterogeneity, because in Botswana everyone is Tswana.

authoritarian regimes currently experiencing some growth are likely to reach the limits of extractive growth before they transform their political institutions in a more inclusive direction—and in fact, probably before there is any desire among the elite for such changes or any strong opposition forcing them to do so.

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.

The records of a relatively small bank, C. Hoare's & Co. in London, which have survived intact from the period 1702–1724, illustrate this point. Though the bank did lend money to aristocrats and lords, fully two-thirds of the biggest borrowers from Hoare's over this period were not from the privileged social classes.

Technological change is only one of the engines of prosperity, but it is perhaps the most critical one.

It is the way the state and society interact and control each other that determines the capacity of our state, the policies of our government, and our resilience, prosperity, security, and ultimately, liberty.

Under inclusive economic institutions, wealth is not concentrated in the hands of a small group that could then use its economic might to increase its political power disproportionately. Furthermore, under inclusive economic institutions there are more limited gains from holding political power, thus weaker incentives for every group and every ambitious, upstart individual to try to take control of the state.

Thomas Hobbes saw things in the 1640s, as the English Civil War was raging, when he argued that people should "submit their Wills" to an all-powerful state, a Leviathan, which would then provide security and prosperity.

Even though extractive institutions can generate some growth, they will usually not generate sustained economic growth, and certainly not the type of growth that is accompanied by creative destruction.

Breaking another mold: Rosa Parks challenges extractive institutions in the U.S. south The Granger Collection, NY

Globalization made the large open spaces of the Americas, its "open frontiers," valuable. Often these frontiers were only mythically open, since they were inhabited by indigenous peoples who were brutally dispossessed. All the same, the scramble for this newly valuable resource was one of the defining processes of the Americas in the second half of the nineteenth century.

Those of Nogales, Sonora, are not so lucky. They live in a different world shaped by different institutions. These different institutions create very disparate incentives for the inhabitants of the two Nogaleses and for the entrepreneurs and businesses willing to invest there. These incentives created by the different institutions of the Nogaleses and the countries in which they are situated are the main reason for the differences in economic prosperity on the two sides of the border.

Inclusive economic institutions led to the development of inclusive markets, inducing a more efficient allocation of resources, greater encouragement to acquire education and skills, and further innovations in technology.

In Egypt, for instance, the first printing press was set up only in 1798, by Frenchmen who were part of the abortive attempt by Napoleon Bonaparte to capture the country.

will refer to political institutions that are sufficiently centralized and pluralistic as inclusive political institutions. When either of these conditions fails, we will refer to the institutions as extractive political institutions.