Chrystia Freeland

To understand the significance of the presidential election this weekend in Russia, read a book by two U.S.-based academics that is being published this month. Why Nations Fail by Daron Acemoglu and James Robinson, of the Massachusetts Institute of Technology and Harvard University, respectively, is a wildly ambitious work that hopscotches through history and around the world to answer the very big question of why some countries get rich and others don’t.

Their one-word answer, as Acemoglu summed it up for me, is ‘‘politics.’’ Acemoglu and Robinson divide the world into countries governed by ‘‘inclusive’’ institutions and those ruled by ‘‘extractive’’ ones. Inclusive societies, with England and its Glorious Revolution of 1688 in the vanguard, deliver sustainable growth and technological innovation. Extractive ones can have spurts of prosperity, but because they are ruled by a narrow elite guided by its own self-interest, their economic vigor eventually fades.

‘‘It is really about societies that have a more equitable distribution of political power versus those that don’t,’’ Acemoglu told me. ‘‘It is about societies where the elite, the rich, can do what they want and those where they cannot.’’

For many of us, that is a welcome conclusion. It may also seem to be an obvious one. But Acemoglu pointed out that academics, policymakers and business leaders have often advanced quite different views. One perspective is that all that matters is economic growth and the right technocratic mix of policies necessary to deliver it. This approach, implicit in the prescriptions of so many International Monetary Fund missions, is that if countries can get richer, everything else will fall into place.

A version of this view, which has gained particular currency since the collapse of the Soviet Union, is that the key is private property. Establish property rights, the reformers in Warsaw, Moscow and Beijing believed, and economic and social success will inevitably follow.

One casualty of the uprisings in the Middle East has been the professionals who didn’t see them coming. The International Monetary Fund has taken a hit for its April 2010 report on Egypt, which praised the country’s ‘‘sustained and wide-ranging reforms since 2004,’’ noting they had made the economy more durable and less vulnerable to external shocks. Ditto the C.I.A., whose director, Leon Panetta, endured the very personal ignominy of seeing his public predictions to Congress proven wrong within hours of making them.

For anyone who watched the collapse of the Soviet Union or the 2008 financial crisis, there is something very familiar about this failure of the experts. There seems to be something about swift, massive paradigm shifts — whether they are the bursting of a financial bubble that has been years in the making, or a popular revolt against a political regime that had been stable for decades — that we find hard to anticipate.

Research by behavioral economists like Dan Ariely of Duke University has suggested that part of the problem may be that when we have a vested interest in the status quo our brains are wired to view it as good and stable. Dr. Ariely’s work has focused on the cognitive blinders our financial self-interest imposes. But a similar bias may shape the views of political experts, who can end up developing a sense of ‘‘ownership’’ of the national elites they study that seems to be nearly as powerful as the proprietary feeling bankers had for the credit derivatives they created.

They are being called the Facebook revolutions, but a better term for the uprisings sweeping through the Middle East might be the Groupon effect. That is because one of the most powerful consequences satellite television and the Internet have had for the protest movements is to help them overcome the problem of collective action, in the same way that Groupon has harnessed the Web for retailers.

“It is a question of co-ordinating people’s beliefs,” said Daron Acemoglu, a professor of economics at the Massachusetts Institute of Technology, who, with Matthew Jackson of Stanford University in California, is working on a paper about the effect of social networks on collective action problems.

Protesting against an authoritarian regime is a prime example of this issue, Mr. Acemoglu said, because opponents of a dictator need to know that their views are widely shared and that a sufficient number of their fellow citizens are willing to join them to make opposition worthwhile.

Daron Acemoglu of MIT is #88 on Foreign Policy‘s list of the 100 Top Global Thinkers of 2010.  Acemoglu tells Chrystia that his big ideas involve “the relationship between democracy and development” and “the historical roots of economic success and political success, and unfortunately also economic failure and political failure, across nations.”  Professor Acemoglu explains why he disagrees with modernization theory, which states that nations tend to democratize as they get richer. He also disagrees with the thesis of fellow FP Global Thinker Raghuram Rajan that income inequality was a root cause of the most recent financial crisis.  Acemoglu also discusses the prospects for democratization in China, and Russia’s project to replicate Silicon Valley outside Moscow.  His next big idea, he hinted, is exploring the relationship between individualism and society.

Here’s Foreign Policy‘s take on what makes him a top global thinker:

Some Nobel Prize selections are a genuine surprise. The same won’t be true if Daron Acemoglu, already at age 43 one of the world’s 20 most cited economists, eventually takes the award. Born in Turkey and educated at the London School of Economics, Acemoglu quickly made a name for himself with papers and monographs that examined how economic incentives align with political life. His specialty is the analysis of the political conditions under which markets thrive — namely, democracy. It’s a theme Acemoglu has explored in a steady stream of academic papers, textbooks, and op-eds — work that so impressed his peers that he won the John Bates Clark medal in 2005, given annually to an outstanding economist under age 40. Acemoglu’s next book, co-authored with Harvard University’s James Robinson, Why Do Nations Fail?, argues that a real “freedom agenda” will start with democratic rules rather than free markets. “You would not need armies to implement such a scheme,” Acemoglu said, “just a functioning bureaucracy.”