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

inclusive in Britain by the eighteenth century, the elite had less to gain by clinging to power and, in fact, much to lose by using widespread repression against those demanding greater democracy. This facet of the virtuous circle made the gradual march of democracy in nineteenth-century Britain both less threatening to the elite and more likely to succeed. This contrasts with the situation in absolutist regimes such as the Austro-Hungarian or Russian empires, where economic institutions were still highly extractive and, in consequence, where calls for greater political inclusion later in the nineteenth century would be met by repression because the elite had too much to lose from sharing power.
    Finally, inclusive political institutions allow a free media to flourish, and a free media often provides information about and mobilizes opposition to threats against inclusive institutions, as it did during thelast quarter of the nineteenth century and first quarter of the twentieth century, when the increasing economic domination of the Robber Barons was threatening the essence of inclusive economic institutions in the United States.
    Though the outcome of the ever-present conflicts continues to be contingent, through these mechanisms the virtuous circle creates a powerful tendency for inclusive institutions to persist, to resist challenges, and to expand as they did in both Britain and the United States. Unfortunately, as we will see in the next chapter, extractive institutions create equally strong forces toward their persistence—the process of the vicious circle.

12.

T HE V ICIOUS C IRCLE
Y OU C AN’T T AKE THE T RAIN TO B O A NYMORE
    A LL OF THE W EST A FRICAN nation of Sierra Leone became a British colony in 1896. The capital city, Freetown, had originally been founded in the late eighteenth century as a home for repatriated and freed slaves. But when Freetown became a British colony, the interior of Sierra Leone was still made up of many small African kingdoms. Gradually, in the second half of the nineteenth century, the British extended their rule into the interior through a long series of treaties with African rulers. On August 31, 1896, the British government declared the colony a protectorate on the basis of these treaties. The British identified important rulers and gave them a new title, paramount chief. In eastern Sierra Leone, for example, in the modern diamond-mining district of Kono, they encountered Suluku, a powerful warrior king. King Suluku was made Paramount Chief Suluku, and the chieftaincy of Sandor was created as an administrative unit in the protectorate.
    Though kings such as Suluku had signed treaties with a British administrator, they had not understood that these treaties would be interpreted as carte blanche to set up a colony. When the British tried to levy a hut tax—a tax of five shillings to be raised from every house—in January 1898, the chiefs rose up in a civil war that became known as the Hut Tax Rebellion. It started in the north, but was strongest and lasted longer in the south, particularly in Mendeland, dominated by the Mende ethnic group. The Hut Tax Rebellion was soon defeated, but it warned the British about the challenges of controllingthe Sierra Leonean hinterland. The British had already started to build a railway from Freetown into the interior. Work began in March 1896, and the line reached Songo Town in December 1898, in the midst of the Hut Tax Rebellion. British parliamentary papers from 1904 recorded that:
    In the case of the Sierra Leone Railways the Native Insurrection that broke out in February 1898 had the effect of completely stopping the works and disorganizing the staff for some time. The rebels descended upon the railway, with the result that the entire staff had to be withdrawn to Freetown … Rotifunk, now situated upon the railways at 55 miles from Freetown, was at that time completely in the hands of the rebels.
    In fact, Rotifunk was not on the planned railway line in 1894. The route was changed after the start of the rebellion, so that instead of going to the northeast, it went south, via Rotifunk and on to Bo, into Mendeland. The British wanted quick access to Mendeland, the heart of the rebellion, and to other potentially disruptive parts of the hinterland if other rebellions were to flare up.
    When Sierra Leone became independent in 1961, the British handed power to Sir Milton Margai and his Sierra Leone People’s Party (SLPP), which