Reading Snippet - Why Nations Fail (6)

Why nations' political and economic institutions diverge so much? The 'critical junction' explanation

While the archaeological and historical perspectives explain why political & economic institutions are necessary in human society and why the institutions diverged between states over time, they did not explain why they diverged so much over a short period of time.

To be precise, people found that Western Europe and North America developing a break-neck pace after the middle ages, breaking away their similarities with South America or Eastern Europe. To account for this, the authors introduced a complementing idea called 'critical juncture'.

These junctures are created by historically impactful events, such as Black Death or de-colonisation. During these events, there are extremely strong interactions among all affected parties, allowing deep changes to be made over a (relatively) short period of time. These junctures are not 'short' in an absolute sense, but in a historical sense. De-colonisation unfolded over the course of half a century, while Black Death's juncture lasted 2 centuries.

During a juncture, it's not just the accelerated interaction frequencies that caused significant divergences, but also two other factors. First of all, the differences in the pre-existing political and economic institutions would be magnified in setting the permitted interaction options, and given the many more decisions that were made, the magnification would indeed generate greater divergences like a 'multiplication factor'. A cited example is Black Death, in which a strong market culture (bigger and more independent towns compared to rural areas) and weaker monarchy in the UK allowed it to steer the institutions to become more inclusive, whereas in Eastern Europe the diminished rural workforce simply allowed landlords to be more extractive over the remaining population.

The second is the more volatile interactions - by definition, these junctures are triggered by major historical events, meaning that the arena in which the interactions unfold are very different from the previously more stable environment. This is likely to give power to a previously quiet force and vice versa, leading to greater likelihood of interactions that are towards the extremes of the option spectrum or that the option spectrum differed entirely from one interaction to another. In short, this simply means that each interaction point forces great divergence instead of allowing small, incremental changes.

As these junctures play their courses, the states will not just look very different from how they were at the start, but also very different between one another.