the cold war and became pro-Western, it was therefore
relatively easy, as well as expedient, for the Egyptian
military to change from central command to crony
capitalism as a method of extraction. Even so, the better
economic performance of Egypt compared with North
Korea was a consequence of the more limited extractive
nature of Egyptian institutions. For one thing, lacking the
stifling control of the North Korean Communist Party, the
Egyptian regime had to placate its population in a way that
the North Korean regime does not. For another, even crony
capitalism generates some incentives for investment, at
least among those favored by the regime, that are totally
absent in North Korea.
Though these details are all important and interesting,
the more critical lessons are in the big picture, which
reveals that in each of these cases, extractive political
institutions have created extractive economic institutions,
transferring wealth and power toward the elite.
The intensity of extraction in these different countries
obviously varies and has important consequences for
prosperity. In Argentina, for example, the constitution and
democratic elections do not work well to promote pluralism,
but they do function much better than in Colombia. At least
the state can claim the monopoly of violence in Argentina.
Partly as a consequence, income per capita in Argentina is
double that of Colombia. The political institutions of both
countries do a much better job of restraining elites than
those in Zimbabwe and Sierra Leone, and as a result,
Zimbabwe and Sierra Leone are much poorer than
Argentina and Colombia.
The vicious circle also implies that even when extractive
institutions lead to the collapse of the state, as in Sierra
Leone and Zimbabwe, this doesn’t put a conclusive end to
the rule of these institutions. We have already seen that civil
wars and revolutions, while they may occur during critical
junctures, do not necessarily lead to institutional change.
The events in Sierra Leone since the civil war ended in
2002 vividly illustrate this possibility.
In 2007 in a democratic election, the old party of Siaka
Stevens, the APC, returned to power. Though the man who
won the presidential election, Ernest Bai Koroma, had no
association with the old APC governments, many of his