Root Causes by Daron Acemoglu

Root Causes Name of Student Institution Affiliation Root Causes There exists a huge gap in the living standards and development levels between poor and rich countries. Acemoglu, Johnson & Robinson (2001) provide an overview of the fundamental causes of the large disparities in per capita between different countries globally. Acemoglu’s ‘Root Causes” attempts to answer critical questions regarding the critical economic issues. Acemoglu observes that there are two critical candidates determine the differences of wealth and prosperity between nations. The two hypothesis examined by Acemoglu are geography and institutions (Acemoglu, 2003, p.27). In his institution hypothesis examination, Acemoglu concludes that human influences are the most crucial in determining wealth between nations. Through human influences, institutions are developed which contribute to the development or under-development of countries. Management of institutions determines whether a country becomes poor or rich. Good institutions often drive their countries to economic prosperity. Acemoglu provides key characteristics possessed by good institutions. These include the following. First, good institutions enforce the property rights for a broad cross section of the society thus motivating them to make investments in their economy thus contributing to economic growth. Secondly, good institutions have power to limit the actions of elites, politicians and other powerful groups thus protecting the population from exploitation and ensuring that the incomes and investments of the citizens are well protected. Lastly, Acemoglu observes that good institutions offer equal opportunities to the citizens allowing them to participate in investments and equal opportunities in the workforce thus contributing positively to the economic prosperity of a nation. Acemoglu’s second candidate explaining the differences in prosperity between nation...