Why Nations Fail: The Origins of Power, Prosperity, and Poverty

into the British Empire in 1884. The Taqali kings and people had access to writing in Arabic, but it was not used—except by the kings, for external communication with other polities and diplomatic correspondence. At first this situation seems very puzzling. The traditional account of the origin of writing in Mesopotamia is that it was developed by states in order to record information, control people, and levy taxes. Wasn’t the Taqali state interested in this?
    These questions were investigated by the historian Janet Ewald in the late 1970s as she tried to reconstruct the history of the Taqali state. Part of the story is that the citizens resisted the use of writing because they feared that it would be used to control resources, such as valuable land, by allowing the state to claim ownership. They also feared that it would lead to more systematic taxation. The dynasty that Isma’il started did not gel into a powerful state. Even if it had wanted to, the state was not strong enough to impose its will over the objections of the citizens. But there were other, more subtle factors at work. Various elites also opposed political centralization, for example, preferring oral to written interaction with citizens, because this allowed them maximum discretion. Written laws or orders could not be taken back or denied and were harder to change; they set benchmarks that governing elites might want to reverse. So neither the ruled nor the rulers of Taqali saw the introduction of writing to be to their advantage. The ruled feared how the rulers would use it, and the rulers themselves saw the absence of writing as aiding their quite precarious grip on power. It was the politics of Taqali that kept writing from being introduced. Though the Somalis had even less of a well-defined elite compared with the Taqali kingdom, it is quite plausible that the same forces inhibited their use of writing and their adoption of other basic technologies.
    The Somali case shows the consequences of the lack of political centralization for economic growth. The historical literature does not record instances of attempts to create such centralization in Somalia. However, it is clear why this would have been very difficult. To politically centralize would have meant that some clans would have been subject to the control of others. But they rejected any suchdominance, and the surrender of their power that this would have entailed; the balance of military power in the society would also have made it difficult to create such centralized institutions. In fact, it is likely that any group or clan attempting to centralize power would not only have faced stiff resistance but would have lost its existing power and privileges. As a consequence of this lack of political centralization and the implied absence of even the most basic security of property rights, Somali society never generated incentives to invest in productivity-enhancing technologies. As the process of industrialization was under way in other parts of the world in the nineteenth and early twentieth centuries, Somalis were feuding and fending for their lives, and their economic backwardness became more ingrained.
E NDURING B ACKWARDNESS
    The Industrial Revolution created a transformative critical juncture for the whole world during the nineteenth century and beyond: those societies that allowed and incentivized their citizens to invest in new technologies could grow rapidly. But many around the world failed to do so—or explicitly chose not to do so. Nations under the grip of extractive political and economic institutions did not generate such incentives. Spain and Ethiopia provide examples where the absolutist control of political institutions and the implied extractive economic institutions choked economic incentives long before the dawn of the nineteenth century. The outcome was similar in other absolutist regimes—for example, in Austria-Hungary, Russia, the Ottoman Empire, and China, though in these cases the rulers, because of fear of creative destruction, not only neglected to encourage economic progress but also took explicit steps to block the spread of industry and the introduction of new technologies that would bring industrialization.
    Absolutism is not the only form of extractive political institutions and was not the only factor preventing industrialization. Inclusive political and economic institutions necessitate some degree of political centralization so that the state can