In their best-selling book Why Nations Fail: The Origins of Power, Poverty and Prosperity published in 2012, Harvard professor James A. Robinson and MIT professor Daren Acemoglu argue that it is successful political systems that create successful economies, not the opposite. The book which presents detailed case studies of the developmental experiences of various countries over a time-frame of 1,000 years, demonstrates how, throughout history, it has been society's political institutions that have determined the nature of its economic institutions and their efficacy. The book surveys the development of Europe and America, as well as countries in East Asia, as proof that “inclusive” political and economic institutions with strong and independent judicial systems have encouraged innovation and the acquisition of skills. On the other hand, as shown by the examples of many chronically underdeveloped countries in Eastern Europe, Africa and the Middle East, a structure of predominantly “extractive” political and economic institutions has primarily served exploitative elites, thus failing to sustain growth, development and innovation. History is not destiny, the authors argue, and it is possible for countries to implement effective reforms towards inclusive institutions. “The Iron Law of Oligarchy can be overcome and a broad coalition of all forces of society join to build their political and economic institutions.” Within this context, the question if this will happen in the Arab Spring becomes all the more pertinent. Robinson and Acemoglu's theory of development is at odds with the determinism of Marxist dependency theory which prescribes that the fates of nations are pre-determined by their position of subordination within a global division of labour. Robinson was recently in Cairo and spoke at the Economic Research Forum (ERF). The essential message of Why Nations Fail is an optimistic one, Robinson asserts in his interview with Al-Ahram Weekly, and it is the politics and domestic choices adopted by governments and not a country's history, geography or culture, that ultimately determine its position and progress in the world. What have been your impressions of Egypt in the wake of the changes brought about by the Arab Spring? Egypt has a homogenous society and deep history of centralised political authority. The Egyptians have resolved the issue of the state, historically, yet it is a state that remains dysfunctional, in many ways, because it is patrimonial with a very politicised structure — where employment and promotion are based on political connections. When a state applies patrimonial and not universal principles, then it needs to change the way it works. Given this, how do you assess Egypt's ability to make the transition into an “inclusive” society where everyone participates in the political and economic dividends? Egypt historically, before the Arab Spring and since the days of the Ottomans, has had extractive economic institutions underpinned by extractive political institutions. Mohamed Ali in the 19th century undertook an extremely successful process of modernisation and institution and state-building, yet his experiment ultimately became unfeasible because of European colonial expansion. The Europeans were not going to tolerate an autonomous power emerging in Egypt. There were also many aspects of economic and social inclusion in Nasser's model. But it was a fundamentally extractive political regime, and eventually even the inclusive aspects of the economy withered away with economic liberalisation. Egypt's political system became a personalised dictatorship ending with [former] president Mubarak aiming to give power to his son. But what the Arab Spring has done is to challenge that. It was a broad social revolt, a challenge to this historical organisation of society. It was not a military coup as Nasser's had been and so the potential to move into a politically inclusive phase is greater. Despite many odds, Egypt's revolt has [so far] generated lots of improvements. There is a real functioning democracy now, much better than any that the Egyptians had under the Ottomans or afterwards. The question now is whether this revolt, this challenge, will pave the path from an extractive to an inclusive society. So, will it? My impression talking to people is that things are very fluid. This is a vastly different political landscape than the one that prevailed in the time of Mubarak. In the short run some groups like the Muslim Brotherhood are more organised and so relatively more advantaged than others. They also have the incentive to try to structure organisations in their favour, according to the interpretations of [their critics] who say that the constitutional process has not been very inclusive. But on the other hand lots of people have been mobilised, and new horizons have opened. There will be elections in April with chances to vote for other choices. It is ultimately going to be difficult for the Brotherhood to consolidate, again, an extractive political regime that excludes the participation of others. What in your view has been the single overriding factor enabling countries to move from “extraction” and into “inclusion” where everyone partakes of society's political and economic dividends? I think that the determining factor has always been a fundamentally political one, which is the construction of an inclusive political system, and of a more effective centralised state. Inclusive economic institutions will follow from having inclusive political institutions. This means it would have been much better if Egypt's constitutional process had attained greater consensus and everyone's voices had been at the table. But the constitution is not the end of the world, nor is it the solution to all the problems. There will be societal pressures regarding women, for instance. You cannot have an inclusive society when you tell such a big segment of it that it has to “stay in the home and not do anything”. Interestingly, the situation regarding women is not anomalous to Egypt. In England, as recently as the 1960s and even 70s, the attitude was that “a woman's place is in the home”. In the end, the important thing that happened in Egypt is not that there is an Islamist government or otherwise. The really important thing is that dictatorship is gone, and that there is now, under way, a democratic and much more politically inclusive process. Given your explanation of under-development, how do you see the “dependency theory” which stipulates that nations remain under-developed primarily because of economic subordination to the advanced global centres of power? The dependency theory was developed within the context of Latin America in the 1950s and 60s, as a means of interpreting why its countries were performing poorly economically. There are different versions of the dependency theory, but the most interesting one in my view is that poor countries get locked into an international division of labour that is very unfavourable to them and which limits their long-term growth potential. But then again, if you look at actual experiences from around the world, you find that there is a huge scope for poor countries to change their position inside this global division of labour. Look at South Korea, Taiwan, Japan and Malaysia for instance; nobody stopped them from advancing. Their progress was because of their domestic politics. The question becomes: what is it that Taiwan did and that the Philippines did not do, in order for Taiwan to advance? It could be that Egypt, or the Middle Eastern countries, are embedded in an international division of labour which is relatively unfavourable to them. But if they could move into a situation of inclusive political institutions, then they would have a government and state that understand this [reality] and start implementing the policies needed to change that. I do not think that international capitalism is going to stop such a process of domestic governments working to create their own politically and economically inclusive organisations, just as it did not stop this process happening in Southeast Asia. In the end, our theory is a fundamentally very optimistic one. It says there is no reason why Egypt should not be just as prosperous as any other place in the world. As for the view that different parts of the world are locked into some enduring poverty because of their geography or culture, I do not think the evidence supports that.
