Why do some nations thrive while others falter? It is a question I have thought about often, especially when travelling or reading the news. The answer is not about luck, geography or even natural resources. It boils down to something less tangible but far more important: the quality of a nation’s institutions. Institutions – those systems and rules that govern a society – can make or break a country. When I first heard about Daron Acemoglu and James Robinson’s book Why Nations Fail, I was hooked by the idea that nations succeed or fail based on whether their institutions are inclusive or extractive. This framework opened my eyes to patterns that have played out again and again throughout history. Inclusive institutions – those that share power broadly, uphold fairness and create opportunities for all – are the bedrock of prosperity. Extractive institutions, on the other hand, concentrate power and wealth in the hands of a few. They stifle innovation, crush opportunity and doom nations to cycles of stagnation. Take the Korean Peninsula, for example. It is a story of two nations with the same language, culture and history, yet they could not be more different. After the Korean War, the North adopted a system of extractive institutions, funnelled all power to the elites and shut down any hope of broader participation. The result? A nation stuck in poverty and isolation. Meanwhile, South Korea chose a different path; it built inclusive institutions that encouraged innovation, rewarded hard work and supported participation from all levels of society. Today, South Korea stands as one of the world’s leading economies, a true testament to the power of inclusion. Nations can break free from the mistakes of the past by committing to reforms that build inclusive systems, protect rights, and invest in people. I remember a conversation with a Zimbabwean entrepreneur a few years ago. He spoke about how his country, once a beacon of potential in Africa, had been hollowed out by decades of corruption and mismanagement. Under Robert Mugabe’s rule, Zimbabwe’s institutions became tools of exploitation. Land seizures, hyperinflation and rampant corruption replaced stability and opportunity. What could have been a thriving nation was reduced to economic chaos. Hearing his story made it clear: without inclusive systems, even the most promising nations can crumble. But it is not all doom and gloom. Some nations have shown how inclusive institutions can turn the tide, even in challenging circumstances. Botswana’s story is one of my favourites. After gaining independence in 1966, this small African nation could have easily fallen victim to the resource curse – where wealth in natural resources becomes more of a curse than a blessing. Instead, Botswana’s leaders focused on good governance, transparency, and wise use of its diamond wealth. By investing in education, healthcare, and infrastructure, the nation built a foundation for sustained growth. Botswana stands as a shining example of how to do it right. The United States, too, owes much of its success to inclusive institutions. Sure, we have had our fair share of challenges, but the Constitution’s principles of checks and balances have been a game changer. By protecting property rights and fostering fair competition, the US created an environment where innovation and economic growth could flourish. I often think about the early days of Silicon Valley-a hotbed of creativity born from a system that rewarded risk-takers and dreamers. That kind of progress only happens when institutions encourage rather than stifle ambition. Of course, history has left scars on many nations; it makes it harder for them to build inclusive systems. Colonialism, for instance, cast a long shadow over Latin America and Sub-Saharan Africa. Spanish colonial rule in Latin America concentrated land and power in the hands of a few elites, creating a legacy of inequality that persisted long after independence. In Sub-Saharan Africa, colonial powers extracted resources without investing in local governance or institutions, leaving many nations ill-prepared for self-rule. The result? Weak institutions often fall prey to corruption and exploitation. Still, history is not destiny. It only offers instances full of lessons and guidelines. Pakistan can rewrite its story by focusing on a few key principles. Strong property rights are one of them. When people feel secure in their ownership, they are more likely to invest in their futures. Take Japan, for example. After World War II, land reforms boosted productivity and helped the nation recover rapidly. Fair political systems also play a crucial role. Norway’s inclusive approach to managing its oil wealth has allowed it to avoid the pitfalls that have plagued other resource-rich nations. Education is another aspect of success. Finland’s focus on education did not just create an informed citizenry-it built a foundation for innovation and global competitiveness. And then there is accountability and transparency. I have always admired Singapore for its transformation from a struggling port city to a global economic hub. By cracking down on corruption and promoting meritocracy, the nation created a system where talent could thrive. Ultimately, the rise or fall of a nation is not about chance – it is about choices. Countries that prioritize fairness, inclusivity and opportunity can achieve remarkable progress, even in the face of adversity. Those that cling to extractive systems, however, risk falling into cycles of poverty and stagnation. I often wonder: What would it take for struggling nations like us to embrace these lessons? It is not easy to change course, especially when history weighs heavily. But it is never too late. Nations can break free from the mistakes of the past by committing to reforms that build inclusive systems, protect rights, and invest in people. Long story short, the question is not whether a nation has the potential to succeed – it is whether its leaders and people have the will to make the tough choices that lead to prosperity. The lessons of history are clear. The future is always a choice, and for those who dare to act, it is a brighter one. The writer, a chartered accountant and certified business analyst, is serving as a CEO for Model Bazaars.