Why Nations Fail

parts of the world. As we will see in 
chapter 10
, societies
that had already taken steps toward inclusive political and
economic institutions, such as the United States and
Australia, and those where absolutism was more seriously
challenged, such as France and Japan, took advantage of
these new economic opportunities and started a process of
rapid economic growth. As such, the usual pattern of
interaction between a critical juncture and existing
institutional differences leading to further institutional and
economic divergence played out again in the nineteenth
century, and this time with an even bigger bang and more
fundamental effects on the prosperity and poverty of
nations.

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North of the fence: Nogales, Arizona Jim
West/imagebroker.net/Photolibrary

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South of the fence: Nogales, Sonora Jim 
West/age
fotostock/Photolibrary

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Consequences of a level playing field: Thomas Edison’s

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1880 patent for the lightbulb Records of the Patent and
Trademark Office; Record Group 241; National Archives

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Economic losers from creative destruction: machine-
breaking Luddites in early-nineteenth-century Britain Mary
Evans Picture Library/Tom Morgan
Consequences of a complete lack of political centralization
in Somalia REUTERS/Mohamed Guled/Landov

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Successive beneficiaries of extractive institutions in Congo:

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King of Kongo © CORBIS King Leopold II The Granger
Collection, NY

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Joseph-Désiré Mobutu © Richard Melloul/Sygma/CORBIS

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Laurent Kabila © Reuters/CORBIS

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The Glorious Revolution: William III of Orange is read the
Bill of Rights before being offered the crown of England by
parliament After Edgar Melville Ward/The Bridgeman Art
Library/Getty Images

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The bubonic plague of the fourteenth century creates a
critical juncture (
The Triumph of Death
painting of the Black
Death by Brueghel the Elder) The Granger Collection, NY

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Beneficiary of institutional innovation: the King of Kuba Eliot
Elisofon/Time & Life Pictures/Getty

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The emergence of hierarchy and inequality before farming:
the grave goods of the Natufian elite
http://en.wikipedia.org/wiki/File:Natufian-Burial-ElWad.jpg

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Extractive growth: Soviet Gulag labor builds the White Sea
canal SOVFOTO

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Britain falls far behind: the ruins of the Roman empire at
Vindolanda Courtesy of the Vindolanda Trust and Adam
Stanford
Innovation, essence of inclusive economic growth: James
Watt’s steam engine The Granger Collection, NY

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Organizational change, a consequence of inclusive
institutions: the factory of Richard Arkwright at Cromford
The Granger Collection, NY
Fruits of unsustainable extractive growth: Zheng He’s ship
alongside Columbus’s 
Santa Maria
Gregory A.
Harlin/National Geographic Stock

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Bird’s-eye view of the dual economy in South Africa:
poverty in Transkei, prosperity in Natal Roger de la
Harpe/Africa Imagery

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Consequences of the Industrial Revolution: the storming of
the Bastille Bridgeman-Giraudon/Art Resource, NY

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Challenges to inclusive institutions: the Standard Oil
Company Library of Congress Prints and Photographs
Division Washington, D.C.

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Noncreative destruction: abandoned Hasting railway station
on the way to Bo in Sierra Leone © Matt Stephenson:
www.itsayshere.org
Extractive institutions today: children working in an Uzbek
cotton field Environmental Justice Foundation,

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cotton field Environmental Justice Foundation,
www.ejfoundation.org
Breaking a mold: three Tswana chiefs on their way to
London Photograph by Willoughby, courtesy of Botswana
National Archives & Records Services

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Breaking another mold: Rosa Parks challenges extractive
institutions in the U.S. south The Granger Collection, NY

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Extractive institutions devour their children: the Chinese
Cultural Revolution vs. “degenerate intellectuals” Weng
Rulan, 1967, IISH Collection, International Institute of Social
History (Amsterdam)

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