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

destruction and technological change. For a while the state may be able to create rapid economic growth by allocating resources and people by fiat, but this process is intrinsically limited. When the limits are hit, growth stops, as it did in the Soviet Union in the 1970s. Even when the Soviets achieved rapid economic growth, there was little technological change in most of the economy, though by pouring massive resources into the military they were able to develop military technologies and even pull ahead of the United States in the space and nuclear race for a short while. But this growth without creative destruction and without broad-based technological innovation was not sustainable and came to an abrupt end.
    In addition, the arrangements that support economic growth underextractive political institutions are, by their nature, fragile—they can collapse or can be easily destroyed by the infighting that the extractive institutions themselves generate. In fact, extractive political and economic institutions create a general tendency for infighting, because they lead to the concentration of wealth and power in the hands of a narrow elite. If another group can overwhelm and outmaneuver this elite and take control of the state, they will be the ones enjoying this wealth and power. Consequently, as our discussion of the collapse of the later Roman Empire and the Maya cities will illustrate ( this page and this page ), fighting to control the all-powerful state is always latent, and it will periodically intensify and bring the undoing of these regimes, as it turns into civil war and sometimes into total breakdown and collapse of the state. One implication of this is that even if a society under extractive institutions initially achieves some degree of state centralization, it will not last. In fact, the infighting to take control of extractive institutions often leads to civil wars and widespread lawlessness, enshrining a persistent absence of state centralization as in many nations in sub-Saharan Africa and some in Latin America and South Asia.
    Finally, when growth comes under extractive political institutions but where economic institutions have inclusive aspects, as they did in South Korea, there is always the danger that economic institutions become more extractive and growth stops. Those controlling political power will eventually find it more beneficial to use their power to limit competition, to increase their share of the pie, or even to steal and loot from others rather than support economic progress. The distribution and ability to exercise power will ultimately undermine the very foundations of economic prosperity, unless political institutions are transformed from extractive to inclusive.

4.

S MALL D IFFERENCES AND C RITICAL J UNCTURES: T HE W EIGHT OF H ISTORY
T HE W ORLD THE P LAGUE C REATED
    I N 1346 THE BUBONIC plague, the Black Death, reached the port city of Tana at the mouth of the River Don on the Black Sea. Transmitted by fleas living on rats, the plague was brought from China by traders traveling along the Silk Road, the great trans-Asian commercial artery. Thanks to Genoese traders, the rats were soon spreading the fleas and the plague from Tana to the entire Mediterranean. By early 1347, the plague had reached Constantinople. In the spring of 1348, it was spreading through France and North Africa and up the boot of Italy. The plague wiped out about half of the population of any area it hit. Its arrival in the Italian city of Florence was witnessed firsthand by the Italian writer Giovanni Boccaccio. He later recalled:
    In the face of its onrush, all the wisdom and ingenuity of man were unavailing … the plague began, in a terrifying and extraordinary manner, to make its disastrous effects apparent. It did not take the form it had assumed in the East, where if anyone bled from the nose it was an obvious portent of certain death. On the contrary, its earliest symptom was the appearance of certain swellings in the groin or armpit, some of which were egg-shaped whilst others were roughly the size of a common apple … Later on the symptomsof the disease changed, and many people began to find dark blotches and bruises on their arms, thighs and other parts of their bodies … Against these maladies … All the advice of physicians and all the power of medicine were profitless and unavailing … And in most cases death occurred within three days from the appearance of the symptoms we