Palestine, for example, the situation was so dire that
starting in the late sixteenth century, peasants left the most
fertile land and moved up to mountainous areas, which
gave them greater protection against banditry.
Extractive economic institutions in the urban areas of the
Ottoman Empire were no less stifling. Commerce was
under state control, and occupations were strictly regulated
by guilds and monopolies. The consequence was that at
the time of the Industrial Revolution the economic
institutions of the Middle East were extractive. The region
stagnated economically.
By the 1840s, the Ottomans were trying to reform
institutions—for example, by reversing tax farming and
getting locally autonomous groups under control. But
absolutism persisted until the First World War, and reform
efforts were thwarted by the usual fear of creative
destruction and the anxiety among elite groups that they
would lose economically or politically. While Ottoman
reformers talked of introducing private property rights to
land in order to increase agricultural productivity, the status
quo persisted because of the desire for political control and
taxation. Ottoman colonization was followed by European
colonization after 1918. When European control ended, the
same dynamics we have seen in sub-Saharan Africa took
hold, with extractive colonial institutions taken over by
independent elites. In some cases, such as the monarchy
of Jordan, these elites were direct creations of the colonial
powers, but this, too, happened frequently in Africa, as we
will see. Middle Eastern countries without oil today have
income levels similar to poor Latin American nations. They
did not suffer from such immiserizing forces as the slave
trade, and they benefited for a longer period from flows of
technology from Europe. In the Middle Ages, the Middle
East itself was also a relatively advanced part of the world
economically. So today it is not as poor as Africa, but the
majority of its people still live in poverty.
W E HAVE SEEN that neither geographic- nor cultural- nor
ignorance-based theories are helpful for explaining the lay
of the land around us. They do not provide a satisfactory
account for the prominent patterns of world inequality: the