other major feudal domains and was susceptible to
challenge. Even though there were peasant rebellions and
civil strife, absolutism in China was stronger, and the
opposition less organized and autonomous. There were no
equivalents of the leaders of the other domains in China
who could challenge the absolutist rule of the emperor and
trace an alternative institutional path. This institutional
difference, in many ways small relative to the differences
separating China and Japan from Western Europe, had
decisive consequences during the critical juncture created
by the forceful arrival of the English and Americans. China
continued in its absolutist path after the Opium Wars, while
the U.S. threat cemented the opposition to Tokugawa rule
in Japan and led to a political revolution, the Meiji
Restoration, as we will see in chapter 10. This Japanese
political revolution enabled more inclusive political
institutions and much more inclusive economic institutions
to develop, and laid the foundations for subsequent rapid
Japanese growth, while China languished under
absolutism.
How Japan reacted to the threat posed by U.S. warships,
by starting a process of fundamental institutional
transformation, helps us understand another aspect of the
lay of the land around us: transitions from stagnation to
rapid growth. South Korea, Taiwan, and finally China
achieved breakneck rates of economic growth since the
Second World War through a path similar to the one that
Japan took. In each of these cases, growth was preceded
by historic changes in the countries’ economic institutions
—though not always in their political institutions, as the
Chinese case highlights.
The logic of how episodes of rapid growth come to an
abrupt end and are reversed is also related. In the same
way that decisive steps toward inclusive economic
institutions can ignite rapid economic growth, a sharp turn
away from inclusive institutions can lead to economic
stagnation. But more often, collapses of rapid growth, such
as in Argentina or the Soviet Union, are a consequence of
growth under extractive institutions coming to an end. As
we have seen, this can happen either because of infighting
over the spoils of extraction, leading to the collapse of the
regime, or because the inherent lack of innovation and