Why Nations Fail

T
HE
 I
RON
 L
AW OF
 O
LIGARCHY
The Solomonic dynasty in Ethiopia lasted until it was
overthrown by a military coup in 1974. The coup was led by
the Derg, a group of Marxist army officers. The regime that
the Derg pitched from power looked like it was frozen in
some earlier century, a historical anachronism. The
emperor Haile Selassie would start his day by arriving in
the courtyard at the Grand Palace, which had been built by
Emperor Menelik II in the late nineteenth century. Outside
the palace would be a crowd of dignitaries anticipating his
arrival, bowing and desperately trying to get his attention.

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The emperor would hold court in the Audience Hall, sitting
on the imperial throne. (Selassie was a small man; so that
his legs were not left swinging in the air, it was the job of a
special pillow bearer to accompany him wherever he went
to make sure there was a suitable pillow to put under his
feet. The bearer kept a stock of fifty-two pillows to cope
with any situation.) Selassie presided over an extreme set
of extractive institutions and ran the country as his own
private property, handing out favors and patronage and
ruthlessly punishing lack of loyalty. There was no economic
development to speak of in Ethiopia under the Solomonic
dynasty.
The Derg initially formed out of 108 representatives of
different military units from all over the country. The
representative of the Third Division in Harar province was a
major named Mengistu Haile Mariam. Though in their initial
declaration of July 4, 1974, the Derg officers declared their
loyalty to the emperor, they soon started to arrest members
of the government, testing how much opposition it would
create. As they became more confident that the support for
Selassie’s regime was hollow, they moved on the emperor
himself, arresting him on September 12. Then the
executions began. Many politicians at the core of the old
regime were swiftly killed. By December, the Derg had
declared that Ethiopia was a socialist state. Selassie died,
probably murdered, on August 27, 1975. In 1975 the Derg
started nationalizing property, including all urban and rural
land and most kinds of private property. The increasingly
authoritarian behavior of the regime sparked opposition
around the country. Large parts of Ethiopia were put
together during the European colonial expansion in the late
nineteenth and early twentieth centuries by the policies of
Emperor Menelik II, the victor of the battle of Adowa, which
we encountered before (
this page
). These included Eritrea
and Tigray in the north and the Ogaden in the east.
Independence movements in response to the Derg’s
ruthless regime emerged in Eritrea and Tigray, while the
Somali army invaded the Somali-speaking Ogaden. The
Derg itself started to disintegrate and split into factions.
Major Mengistu turned out to be the most ruthless and
clever of them. By mid-1977 he had eliminated his major
opponents and effectively taken charge of the regime,

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which was saved from collapse only by a huge influx of
weapons and troops from the Soviet Union and Cuba later
in November of that year.
In 1978 the regime organized a national celebration
marking the fourth anniversary of the overthrow of Haile
Selassie. By this time Mengistu was the unchallenged
leader of the Derg. As his residence, the place from where
he would rule Ethiopia, he had chosen Selassie’s Grand
Palace, left unoccupied since the monarchy was abolished.
At the celebration, he sat on a gilded armchair, just like the
emperors of old, watching the parade. Official functions
were now held once again at the Grand Palace, with
Mengistu sitting on Haile Selassie’s old throne. Mengistu
started to compare himself to Emperor Tewodros, who had
refounded the Solomonic Dynasty in the mid-nineteenth
century after a period of decline.
One of his ministers, Dawit Wolde Giorgis, recalled in his
memoir:
At the beginning of the Revolution all of us
had utterly rejected anything to do with the
past. We would no longer drive cars, or wear
suits; neckties were considered criminal.
Anything that made you look well-off or
bourgeois, 
anything 
that 
smacked 
of
affluence or sophistication, was scorned as