'Why Nations Fail': Will this be China's century?

Acemoglu does not believe that China can become an innovative economy without opening up its politics to real competition as well. “I think the Communist Party leadership is worried about this, but is probably more sanguine [than worried] that they can do it.” Public pressure could always force political reform, but it’s not clear that discontent is very widespread. And on the other hand, the elite might become “even more rapacious” in how they squeeze the economy. If Bo Xilai had continued his rise in the party, he might have taken China down that road, suggests Acemoglu.

“I think the country has huge potential, and it has achieved so much in thirty years," he said. "It was the country that had the largest number of people under the poverty line and it has become a country that is largely dominated by a middle class.

“But that did not happen because there was some directive that China should produce more. They tried that. It didn’t work. That did not happen because the Communist Party tightened its grip or changed its view of what was the best course for the country, although that happened under Deng Xiaoping. It changed because, mostly in the 1980s, incentives in agriculture changed big time.”

Further conversations with Daron Acemoglu, co-author of “Why Nations Fail”:

Marshall Ingwerson is the Monitor's managing editor.

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