fact that the process of economic divergence started with
the Industrial Revolution in England during the eighteenth
and nineteenth centuries and then spread to Western
Europe and to European settler colonies; the persistent
divergence between different parts of the Americas; the
poverty of Africa or the Middle East; the divergence
between Eastern and Western Europe; and the transitions
from stagnation to growth and the sometimes abrupt end to
growth spurts. Our institutional theory does.
In the remaining chapters, we will discuss in greater
detail how this institutional theory works and illustrate the
wide range of phenomena it can account for. These range
from the origins of the Neolithic Revolution to the collapse
of several civilizations, either because of the intrinsic limits
to growth under extractive institutions or because of limited
steps toward inclusiveness being reversed.
We will see how and why decisive steps toward inclusive
political institutions were taken during the Glorious
Revolution in England. We will look more specifically at the
following:
• How inclusive institutions emerged from the interplay
of the critical juncture created by Atlantic trade and the
nature of preexisting English institutions.
• How these institutions persisted and became
strengthened to lay the foundations for the Industrial
Revolution, thanks in part to the virtuous circle and in
part to fortunate turns of contingency.
• How many regimes reigning over absolutist and
extractive institutions steadfastly resisted the spread of
new technologies unleashed by the Industrial
Revolution.
• How Europeans themselves stamped out the
possibility of economic growth in many parts of the
world that they conquered.
• How the vicious circle and the iron law of oligarchy
have created a powerful tendency for extractive
institutions to persist, and thus the lands where the
Industrial Revolution originally did not spread remain
relatively poor.
• Why the Industrial Revolution and other new