The book is a sweeping attempt to explain the gut-wrenching poverty that leaves 1.29 billion people in the developing world struggling to live on less than $1.25 a day. It focuses on the processes of institutional drift that produce political and economic institutions that can be either inclusive — focused on power-sharing, productivity, education, technological advances and the well-being of the nation as a whole; or extractive — bent on grabbing wealth and resources away from one part of society to benefit another. It argues that some nations are wealthier and more prosperous than others because of their political and economic institutions (e.g. government, market system), and not because of their climates, geography or culture. Essentially, good (inclusive) institutions enable investment and a sense of security in the government and the economic system and so nations prosper, but bad (extractive) institutions do not. Virtuous circles of innovation, expansion and peace are formed from inclusive institutions which form a cycle of increasing prosperity.
This book is particularly interesting because it explains the theory with a huge range of historical examples from the past 200 years plus, focusing not just on the traditional western Europe and the USA vs. African developing nations, but touching on places across the world such as Asia, South America and Eastern Europe. It is especially interesting for anyone who is interested in the sources of poverty and inequality, along with the history of colonialism and feudalism.