Why Nations Fail

When I mention institutions, I do not refer exclusively to the political and government institutions. Corporations, educational institutions such as schools and universities, religious organizations, charitable groups and even local groups are institutions. However, in the modern world, the most influential institutions in a country are the Government (at the national, state, or local level) and the Companies where persons work at. These are often multi-generational establishments with their own culture, slightly affected by its less influential members (such as citizens and employees), significantly affected by its more influential ones (such as rulers and managers), but mostly encoded by decades or centuries of written protocols, regulations, and customs.

Regardless of the status of the institutions, its internal functioning will inevitably affect everybody underneath them. A meritocratic company, that rewards employees by their skills and capacities and not by nepotism or favoritis…