The Indicator from Planet Money

Why are some nations richer?

8 snips
Oct 15, 2024
Discover the groundbreaking insights from this year's Economics Nobel laureates about the role of strong institutions in a nation's wealth. Explore how colonial history and mortality rates influenced today's economic disparities. Learn about the delicate balance between inclusive institutions and democracy in fostering growth, with a focus on China's unique path. The discussion highlights how climate, politics, and culture intertwine to shape economic outcomes and raises concerns over the sustainability of democratic frameworks in current political climates.
Ask episode
AI Snips
Chapters
Books
Transcript
Episode notes
INSIGHT

National Wealth Disparities

  • A fundamental question in economics is what makes some nations rich while others remain poor.
  • Several factors like climate, politics, geography, and culture could explain these differences.
INSIGHT

AJR's Theory of Inclusive Institutions

  • AJR theorized that well-functioning governments, free markets, education, and democracy (inclusive institutions) contribute to a nation's wealth.
  • Proving this was difficult because it's hard to determine if wealth creates these institutions or vice-versa.
ANECDOTE

Colonialism and Institutional Development

  • To prove their theory, AJR studied colonialism in the 1800s, finding varying death rates among European settlers due to diseases like malaria.
  • Higher death rates led to extractive strategies in some colonies and inclusive institutions in others (e.g., U.S., Canada, Australia).
Get the Snipd Podcast app to discover more snips from this episode
Get the app