Inclusive economic institutions require secure property rights and economic opportunities not just for the elite but for a broad cross-section of society. Secure
English exports, led by cotton textiles, doubled between 1780 and 1800. It was the growth in this sector that pulled ahead the whole economy. The combination of technological and organizational innova...
Absolutism and a lack of, or weak, political centralization are two different barriers to the spread of industry. But they are also connected; both are kept in place by fear of creative destruction an...
The rebirth of China came with a significant move away from one of the most extractive set of economic institutions and toward more inclusive ones. Market incentives in agriculture and industry, then...
The government in North Korea is a communist dictatorship opposed to private property and markets. But it is difficult to control black markets, and black markets make transactions in cash. Of course...
One of the most notorious of these was Cornelius Vanderbilt, who famously remarked, What do I care about the Law? Hain’t I got the power?
Many citizens in Rome did not need to work: they lived off the handouts from the government.
Infighting and instability are thus inherent features of extractive institutions, and they not only create further inefficiencies but also often reverse any political centralization, sometimes even le...
In fact, it is known that a major technological innovation, the introduction of the steel axe among the group of Australian Aboriginal peoples known as Yir Yoront, led not to more intense production b...
In North Korea, the state built an education system to inculcate propaganda, but was unable to prevent famine. In colonial Latin America, the state focused on coercing indigenous peoples. In neither t...
But it also meant that there were checks within Parliament against any single group becoming too powerful and abusing its power. It was the critical factor in the emergence of pluralistic political in...
Though the early growth in Botswana relied on meat exports, things changed dramatically when diamonds were discovered. The management of natural resources in Botswana also differed markedly from that...
Their next option was Australia. Its eastern seaboard had been explored by the great seafarer Captain James Cook. On April 29, 1770, Cook landed in a wonderful inlet, which he called Botany Bay in hon...
The records of a relatively small bank, C. Hoare’s & Co. in London, which have survived intact from the period 1702–1724, illustrate this point. Though the bank did lend money to aristocrats and lords...
Pluralism also creates a more open system and allows independent media to flourish, making it easier for groups that have an interest in the continuation of inclusive institutions to become aware and...
Many studies estimate that only about 10 or at most 20 percent of aid ever reaches its target.
IN 1445 IN THE GERMAN city of Mainz, Johannes Gutenberg unveiled an innovation with profound consequences for subsequent economic history: a printing press based on movable type.
For every elite benefiting from extraction there is a non-elite who would love to replace him.
Nations fail when they have extractive economic institutions, supported by extractive political institutions that impede and even block economic growth.
IF THE POLITICAL and economic institutions of Latin America over the past five hundred years were shaped by Spanish colonialism, those of the Middle East were shaped by Ottoman colonialism.