Why Nations Fail: The Origins of Power, Prosperity, and Poverty (71 page)

The reconstruction of the meeting between Hwang Pyŏng-Wŏn and his brother is taken from James A. Foley’s interview of Hwang transcribed in Foley (2003), pp. 197–203.

The notion of extractive institutions originates from Acemoglu, Johnson, and Robinson (2001). The terminology of inclusive institutions was suggested to us by Tim Besley. The terminology of economic losers and the distinction between them and political losers comes from Acemoglu and Robinson (2000b). The data on Barbados comes from Dunn (1969). Our treatment of the Soviet economy relies on Nove (1992) and Davies (1998). Allen (2003) provides an alternative and more positive interpretation of Soviet economic history.

In the social science literature there is a great deal of research related to our theory and argument. See Acemoglu, Johnson, and Robinson (2005b) for an overview of this literature and our contribution to it. The institutional view of comparative development builds on a number of important works. Particularly notable is the work of North; see North and Thomas (1973), North (1982), North and Weingast (1989), and North, Wallis, and Weingast (2009). Olson (1984) also provided a very influential account of the political economy of economic growth. Mokyr (1990) is a fundamental book that links economic losers to comparative technological change in world history. The notion of economic losers is very widespread in social science as an explanation for why efficient institutional and policy outcomes do not occur. Our interpretation, which builds on Robinson (1998) and Acemoglu and Robinson (2000b, 2006b), differs by emphasizing the idea that the most important barrier to the emergence of inclusive institutions is elites’ fear that they will lose their political power. Jones (2003) provides a rich comparative history emphasizing similar themes, and Engerman and Sokoloff’s (1997) important work on the Americas also emphasizes these ideas. A seminal political economy interpretation of African underdevelopment was developed by Bates (1981, 1983, 1989), whose work heavily influenced ours. Seminal studies by Dalton (1965) and Killick (1978) emphasize the role of politics in African development and particularly how the fear of losing political power influences economic policy. The notion of political
losers was previously implicit in other theoretical work in political economy, for instance, Besley and Coate (1998) and Bourguignon and Verdier (2000). The role of political centralization and state institutions in development has been most heavily emphasized by historical sociologists following the work by Max Weber. Notable is the work of Mann (1986, 1993), Migdal (1988), and Evans (1995). In Africa, work on the connection between the state and development is emphasized by Herbst (2000) and Bates (2001). Economists have recently begun to contribute to this literature; for example, Acemoglu (2005) and Besley and Persson (2011). Finally, Johnson (1982), Haggard (1990), Wade (1990), and Amsden (1992) emphasized how it was the particular political economy of East Asian nations that allowed them to be so economically successful. Finley (1965) made a seminal argument that slavery was responsible for the lack of technological dynamism in the classical world.

The idea that growth under extractive institutions is possible but is also likely to run out of steam is emphasized in Acemoglu (2008).

Benedictow (2004) provides a definitive overview of the Black Death, though his assessments of how many people the plague killed are controversial. The quotations from Boccaccio and Ralph of Shrewsbury are reproduced from Horrox (1994). Hatcher (2008) provides a compelling account of the anticipation and arrival of the plague in England. The text of the Statute of Laborers is available online from the Avalon Project, at
avalon.law.yale.edu/medieval/statlab.asp

The fundamental works on the impact of the Black Death on the divergence of Eastern and Western Europe are North and Thomas (1973) and particularly Brenner (1976), whose analysis of how the initial distribution of political power affected the consequences of the plague has greatly influenced our thinking. See DuPlessis (1997) on the Second Serfdom in Eastern Europe. Conning (2010) and Acemoglu and Wolitzky (2011) develop formalizations of Brenner’s thesis. The quote from James Watt is reproduced from Robinson (1964), pp. 223–24.

In Acemoglu, Johnson, and Robinson (2005a) we first presented the argument
that it was the interaction between Atlantic trade and initial institutional differences that led to the divergence of English institutions and ultimately the Industrial Revolution. The notion of the iron law of oligarchy is due to Michels (1962). The notion of a critical juncture was first developed by Lipset and Rokkan (1967).

On the role of institutions in the long-run development of the Ottoman Empire, the research of Owen (1981), Owen and Pamuk (1999), and Pamuk (2006) is fundamental.

On Steffens’s mission to Russia and his words to Baruch, see Steffens (1931), chap. 18, pp. 790–802. For the number of people who starved in the 1930s, we use the figures of Davies and Wheatcroft (2004). On the 1937 census numbers, see Wheatcroft and Davies (1994a, 1994b). The nature of innovation in the Soviet economy is studied in Berliner (1976). Our discussion of how Stalinism, and particularly economic planning, really worked is based on Gregory and Harrison (2005). On how writers of U.S. economics textbooks continually got Soviet economic growth wrong, see Levy and Peart (2009).

Our treatment and interpretation of the Lele and the Bushong is based on the research of Douglas (1962, 1963) and Vansina (1978).

On the concept of the Long Summer, see Fagan (2003). An accessible introduction to the Natufians and archaeological sites we mention can be found in Mithen (2006) and Barker (2006). The seminal work on Abu Hureyra is Moore, Hillman, and Legge (2000), which documents how sedentary life and institutional innovation appeared prior to farming. See Smith (1998) for a general overview of the evidence that sedentary life preceded farming, and see Bar-Yosef and Belfer-Cohen (1992) for the case of the Natufians. Our approach to the Neolithic Revolution is inspired by Sahlins (1972), which also has the anecdote about the Yir Yoront.

Our discussion of Maya history follows Martin and Grube (2000) and Webster (2002). The reconstruction of the population history of Copán comes from Webster, Freter, and Gonlin (2000). The number of dated monuments is from Sidrys and Berger (1979).

The discussion of the Venetian case follows Puga and Trefler (2010), and chaps. 8 and 9 of Lane (1973).

The material on Rome is contained in any standard history. Our interpretation of Roman economic institutions follows Finlay (1999) and Bang (2008). Our account of Roman decline follows Ward-Perkins (2006) and Goldsworthy (2009). On institutional changes in the late Roman Empire, see Jones (1964). The anecdotes about Tiberius and Hadrian are from Finley (1999).

The evidence from shipwrecks was first used by Hopkins (1980). See De Callataǿ (2005) and Jongman (2007) for an overview of this and the Greenland Ice Core Project.

The Vindolanda tablets are available online at
vindolanda.csad.ox.ac.uk/
. The quote we use comes from TVII Pub. no.: 343.

The discussion of the factors that led to the decline of Roman Britain follows Cleary (1989), chap. 4; Faulkner (2000), chap. 7; Dark (1994), chap. 2.

On Aksum, see Munro-Hay (1991). The seminal work on European feudalism and its origins is Bloch (1961); see Crummey (2000) on Ethiopian feudalism. Phillipson (1998) makes the comparison between the collapse of Aksum and the collapse of the Roman Empire.

The story of Lee’s machine and meeting with Queen Elizabeth I is available at
calverton.homestead.com/willlee.html
.

Allen (2009b) presents the data on real wages using Diocletian’s Edict on Maximum Prices.

Our argument about the causes of the Industrial Revolution is highly influenced by the arguments made in North and Thomas (1973), North and Weingast (1989), Brenner (1993), Pincus (2009), and Pincus and Robinson (2010). These scholars in turn were inspired by earlier Marxist interpretations of British institutional change and the emergence of capitalism; see Dobb

(1963) and Hill (1961, 1980). See also Tawney’s (1941) thesis about how the state building project of Henry VIII changed the English social structure.

The text of the Magna Carta is available online at the Avalon Project, at
avalon.law.yale.edu/medieval/magframe.asp
.

Elton (1953) is the seminal work on the development of state institutions under Henry VIII, and Neale (1971) relates these to the evolution of parliament.

On the Peasants’ Revolt, see Hilton (2003). The quote from Hill on monopolies is from Hill (1961), p. 25. On Charles I’s period of “personal rule,” we follow Sharp (1992). Our evidence on how different groups and regions sided either for or against Parliament comes from Brunton and Pennington (1954), Hill (1961), and Stone (2001). Pincus (2009) is fundamental on the Glorious Revolution and discusses many of the specific changes in policies and economic institutions; for example, the repeal of the Hearth Tax and the creation of the Bank of England. See also Pincus and Robinson (2010). Pettigrew (2007, 2009) discusses the attack on monopolies, including the Royal African Company, and our data on petitioning comes from his papers. Knights (2010) emphasizes the political importance of petitioning. Our information on Hoare’s Bank comes from Temin and Voth (2008).

Our information about Superviser Cowperthwaite and the excise tax bureaucracy comes from Brewer (1988).

Our overview of the economic history of the Industrial Revolution rests on Mantoux (1961), Daunton (1995), Allen (2009a), and Mokyr (1990, 2009), who provide details on the famous inventors and inventions we discuss. The story about the Baldwyn family is from Bogart and Richardson (2009, 2011), who stress the connection between the Glorious Revolution, the reorganization of property rights, and the construction of roads and canals. On the Calicoe Acts and Manchester Acts, see O’Brien, Griffiths, and Hunt (1991), which is the source of the quotes from the legislation. On the dominance of new people in industry, see Daunton (1995), chap. 7, and Crouzet (1985).

Our account of why the major institutional changes first took place in England is based on Acemoglu, Johnson, and Robinson (2005a) and Brenner (1976). The data on the number of independent merchants and their political preferences come from Zahedieh (2010).

On the opposition to the printing press in the Ottoman Empire, see Savage-Smith (2003) pp. 656–59. Comparative historical literacy comes from Easterlin (1981).

Our discussion of political institutions of Spain follows Thompson (1994a, 1994b). For evidence on the economic decline of Spain over this period, see Nogal and Prados de la Escosura (2007).

Our discussion of the impediments to economic development in Austria-Hungary follows Blum (1943), Freudenberger (1967), and Gross (1973). The quotation from Maria Theresa comes from Freudenberger, p. 495. All other quotations from Count Hartig and Francis I are from Blum. Francis’s reply to the delegates from the Tyrol is quoted from Jászi (1929), pp. 80–81. The comment of Friedrich von Gentz to Robert Owen is also quoted from Jászi (1929), p. 80. The experience of the Rothschilds in Austria is discussed in chap. 2 of Corti (1928).

Our analysis of Russia follows Gerschenkron (1970). The quotation from Kropotkin is from p. 60 of the 2009 edition of his book. The conversation between Nicholas and Mikhail is quoted from Saunders (1992), p. 117. Kankrin’s quote on railways is in Owen (1991), pp. 15–16.

The speech by Nicholas to the manufacturers is reproduced from Pintner 967), p. 100.

The quote from A. A. Zakrevskii is from Pintner (1967), p. 235.

On Admiral Zheng, see Dreyer (2007). The economic history of early Modern China is covered by Myers and Wang (2002). The quote from T’ang Chen is quoted from Myers and Wang, pp. 564–65.

See Zewde (2002) for an overview of the relevant Ethiopian history. The data on how extractive Ethiopia has been historically come from Pankhurst (1961), as do all the quotes we reproduce here.

Our description of Somali institutions and history follows Lewis (1961, 2002). The
heer
of the Hassan Ugaas is reproduced on p.177 of Lewis (1961); our description of a feud comes from chap. 8 of Lewis (1961), where he reports many other examples. On the Kingdom of Taqali and writing, see Ewald (1988).

Our discussion of the takeover of Ambon and Banda by the Dutch East India Company and the company’s negative effect on the development of Southeast Asia follows Hanna (1978) and particularly Reid (1993), chap. 5. The quotes from Reid on Tomé Pires are from p. 271; the Dutch factor in
Maguindanao, p. 299; the sultan of Maguindanao, pp. 299–300. Data on the impact of the Dutch East India Company on the price of spices come from O’Rourke and Williamson (2002).

A definitive overview of slavery in African society and the impact of the slave trade is Lovejoy (2000). Lovejoy, p. 47, Table 31, reports consensus estimates of the extent of the slave trade. Nunn (2008) provided the first quantitative estimates of the impact of the slave trade on African economic institutions and economic growth. The data on firearms and gunpowder imports are from Inikori (1977). The testimony of Francis Moore is quoted from Lovejoy (2000), pp. 89–90. Law (1977) is a seminal study of the expansion of the Oyo state. The estimates of the impact of the slave trade on population in Africa are taken from Manning (1990). Lovejoy (2000), chap. 8, the essays in Law (1995), and the important book of Austin (2005) are the basis for our discussion of the analysis of the period of “legitimate commerce.” Data on the proportion of Africans who were slaves in Africa comes from Lovejoy (2000), e.g., p. 192, Table 9.2.