Дарон Аджемоглу - Why Nations Fail

Second, as we have seen several times before, inclusive political institutions support and are supported by inclusive economic institutions. This creates another mechanism of the virtuous circle. Inclusive economic institutions remove the most egregious extractive economic relations, such as slavery and serfdom, reduce the importance of monopolies, and create a dynamic economy, all of which reduces the economic benefits that one can secure, at least in the short run, by usurping political power. Because economic institutions had already become sufficiently inclusive in Britain by the eighteenth century, the elite had less to gain by clinging to power and, in fact, much to lose by using widespread repression against those demanding greater democracy. This facet of the virtuous circle made the gradual march of democracy in nineteenth-century Britain both less threatening to the elite and more likely to succeed. This contrasts with the situation in absolutist regimes such as the Austro-Hungarian or Russian empires, where economic institutions were still highly extractive and, in consequence, where calls for greater political inclusion later in the nineteenth century would be met by repression because the elite had too much to lose from sharing power.

Finally, inclusive political institutions allow a free media to flourish, and a free media often provides information about and mobilizes opposition to threats against inclusive institutions, as it did during the last quarter of the nineteenth century and first quarter of the twentieth century, when the increasing economic domination of the Robber Barons was threatening the essence of inclusive economic institutions in the United States.

Though the outcome of the ever-present conflicts continues to be contingent, through these mechanisms the virtuous circle creates a powerful tendency for inclusive institutions to persist, to resist challenges, and to expand as they did in both Britain and the United States. Unfortunately, as we will see in the next chapter, extractive institutions create equally strong forces toward their persistence—the process of the vicious circle.

12.

THE VICIOUS CIRCLE

YOU CAN’T TAKE THE TRAIN TO BO ANYMORE

ALL OF THE WEST AFRICAN nation of Sierra Leone became a British colony in 1896. The capital city, Freetown, had originally been founded in the late eighteenth century as a home for repatriated and freed slaves. But when Freetown became a British colony, the interior of Sierra Leone was still made up of many small African kingdoms. Gradually, in the second half of the nineteenth century, the British extended their rule into the interior through a long series of treaties with African rulers. On August 31, 1896, the British government declared the colony a protectorate on the basis of these treaties. The British identified important rulers and gave them a new title, paramount chief. In eastern Sierra Leone, for example, in the modern diamond-mining district of Kono, they encountered Suluku, a powerful warrior king. King Suluku was made Paramount Chief Suluku, and the chieftaincy of Sandor was created as an administrative unit in the protectorate.

Though kings such as Suluku had signed treaties with a British administrator, they had not understood that these treaties would be interpreted as carte blanche to set up a colony. When the British tried to levy a hut tax—a tax of five shillings to be raised from every house—in January 1898, the chiefs rose up in a civil war that became known as the Hut Tax Rebellion. It started in the north, but was strongest and lasted longer in the south, particularly in Mendeland, dominated by the Mende ethnic group. The Hut Tax Rebellion was soon defeated, but it warned the British about the challenges of controlling the Sierra Leonean hinterland. The British had already started to build a railway from Freetown into the interior. Work began in March 1896, and the line reached Songo Town in December 1898, in the midst of the Hut Tax Rebellion. British parliamentary papers from 1904 recorded that:

In the case of the Sierra Leone Railways the Native Insurrection that broke out in February 1898 had the effect of completely stopping the works and disorganizing the staff for some time. The rebels descended upon the railway, with the result that the entire staff had to be withdrawn to Freetown … Rotifunk, now situated upon the railways at 55 miles from Freetown, was at that time completely in the hands of the rebels.

In fact, Rotifunk was not on the planned railway line in 1894. The route was changed after the start of the rebellion, so that instead of going to the northeast, it went south, via Rotifunk and on to Bo, into Mendeland. The British wanted quick access to Mendeland, the heart of the rebellion, and to other potentially disruptive parts of the hinterland if other rebellions were to flare up.

When Sierra Leone became independent in 1961, the British handed power to Sir Milton Margai and his Sierra Leone People’s Party (SLPP), which attracted support primarily in the south, particularly Mendeland, and the east. Sir Milton was followed as prime minister by his brother, Sir Albert Margai, in 1964. In 1967 the SLPP narrowly lost a hotly contested election to the opposition, the All People’s Congress Party (APC), led by Siaka Stevens. Stevens was a Limba, from the north, and the APC got most of their support from northern ethnic groups, the Limba, the Temne, and the Loko.

Though the railway to the south was initially designed by the British to rule Sierra Leone, by 1967 its role was economic, transporting most of the country’s exports: coffee, cocoa, and diamonds. The farmers who grew coffee and cocoa were Mende, and the railway was Mendeland’s window to the world. Mendeland had voted hugely for Albert Margai in the 1967 election. Stevens was much more interested in holding on to power than promoting Mendeland’s exports. His reasoning was simple: whatever was good for the Mende was good for the SLPP, and bad for Stevens. So he pulled up the railway line to Mendeland. He then went ahead and sold off the track and rolling stock to make the change as irreversible as possible. Now, as you drive out of Freetown to the east, you pass the dilapidated railway stations of Hastings and Waterloo. There are no more trains to Bo. Of course, Stevens’s drastic action fatally damaged some of the most vibrant sectors of Sierra Leone’s economy. But like many of Africa’s postindependence leaders, when the choice was between consolidating power and encouraging economic growth, Stevens chose consolidating his power, and he never looked back. Today you can’t take the train to Bo anymore, because like Tsar Nicholas I, who feared that the railways would bring revolution to Russia, Stevens believed the railways would strengthen his opponents. Like so many other rulers in control of extractive institutions, he was afraid of challenges to his political power and was willing to sacrifice economic growth to thwart those challenges.

Stevens’s strategy at first glance contrasts with that of the British. But in fact, there was a significant amount of continuity between British rule and Stevens’s regime that illustrates the logic of vicious circles. Stevens ruled Sierra Leone by extracting resources from its people using similar methods. He was still in power in 1985 not because he had been popularly reelected, but because after 1967 he set up a violent dictatorship, killing and harassing his political opponents, particularly the members of the SLPP. He made himself president in 1971, and after 1978, Sierra Leone had only one political party, Stevens’s APC. Stevens thus successfully consolidated his power, even if the cost was impoverishing much of the hinterland.

During the colonial period, the British used a system of indirect rule to govern Sierra Leone, as they did with most of their African colonies. At the base of this system were the paramount chiefs, who collected taxes, distributed justice, and kept order. The British dealt with the cocoa and coffee farmers not by isolating them, but by forcing them to sell all their produce to a marketing board developed by the colonial office purportedly to help the farmers. Prices for agricultural commodities fluctuated wildly over time. Cocoa prices might be high one year but low the next. The incomes of farmers fluctuated in tandem. The justification for marketing boards was that they, not the farmers, would absorb the price fluctuations. When world prices were high, the board would pay the farmers in Sierra Leone less than the world price, but when world prices were low, they would do the opposite. It seemed a good idea in principle. The reality was very different, however. The Sierra Leone Produce Marketing Board was set up in 1949. Of course the board needed a source of revenues to function. The natural way to attain these was by paying farmers just a little less than they should have received either in good or bad years. These funds could then be used for overhead expenditures and administration. Soon the little less became a lot less. The colonial state was using the marketing board as a way of heavily taxing farmers.