From Success to Failure: Why Nations Drift Apart

💡Inclusive institutions are crucial for sustained economic growth and prosperity.

🌍Different nations evolve differently due to variations in their institutional frameworks.

🏛️Extractive institutions, which concentrate power in the hands of the few, contribute to the decline of prosperous nations.

🔀Critical junctures, such as the Glorious Revolution in England, can lead to a shift towards inclusive institutions.

🛠️The Industrial Revolution was made possible by inclusive institutions, property rights, and technological innovations.

Why did Venice decline after being the richest place in the world?

—Venice's decline can be attributed to the transformation of its institutions from inclusive to extractive, as the elite monopolized power and undermined economic growth.

What role did institutions play in the fall of the Roman Empire?

—The Roman Empire's extractive institutions, characterized by power struggles, civil wars, and limited rights for the majority, led to its decline and eventual collapse.

How did England achieve success despite its initial underdevelopment?

—England's inclusive institutions, established through critical junctures like the Glorious Revolution, enabled it to foster innovation, protect property rights, and drive the Industrial Revolution.

Why did innovation pose a threat to the elites?

—Innovation threatened the elites' power and the livelihoods of workers, leading to resistance throughout history. The fear of creative destruction often hindered societal progress.

What role did the Glorious Revolution play in shaping England's trajectory?

—The Glorious Revolution empowered Parliament, established inclusive institutions, and reorganized the economy, laying the foundation for England's future success and the Industrial Revolution.

00:00This video discusses why prosperous nations often decline and explores the cases of Venice and Rome.

05:06Venice's decline was due to the transformation of its institutions, leading to extractive practices and stifling economic growth.

09:59The Roman Empire's extractive institutions, characterized by power struggles and limited rights, contributed to its fall.

11:40England's success was achieved through inclusive institutions established during critical junctures like the Glorious Revolution.

13:38Innovation often faced resistance from elites throughout history, hindering societal progress.

16:14The Glorious Revolution empowered Parliament, established inclusive institutions, and reorganized the economy, paving the way for England's success and the Industrial Revolution.