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Edo Bay

Why Nations Fail: The Origins of Power, Prosperity, and Poverty

Edo Bay, entered by four U.S. warships in July 1853, became the setting for a challenge to Japan’s closed Tokugawa order. The encounter illustrates how an external shock can have sharply different consequences depending on a society’s existing institutions: in Japan, the threat helped cement opposition to the shogunate and set in motion a political revolution.

The arrival of the warships

In July 1853, four U.S. warships commanded by Matthew C. Perry entered Edo Bay and demanded trade concessions. The demand resembled the terms England had obtained from China in the Opium Wars. Japan, like China, was under absolutist rule and had prohibited international trade under the Tokugawa family, which had taken power in 1600. The arrival therefore confronted an established political and economic order with pressure from Western powers.

A critical juncture with different outcomes

The book treats the arrival as a critical juncture: a disruption to the existing balance of political and economic power whose effects depend partly on the institutions already in place. Japan’s absolutist regime had only a tenuous hold on the leaders of its major feudal domains and was vulnerable to challenge. China’s absolutism, by contrast, was stronger, and its opposition less organized and autonomous; it had no equivalent to Japan’s domain leaders who could contest imperial rule and pursue an alternative institutional path.

These differences shaped the contrasting responses to Western pressure. China continued along its absolutist path after the Opium Wars. In Japan, the U.S. threat strengthened opposition to Tokugawa rule and led to the Meiji Restoration. The same broad kind of external challenge thus reinforced one political order in China while helping to unsettle another in Japan.

Consequences and significance

The political revolution that followed enabled more inclusive political and economic institutions to develop in Japan, laying foundations for rapid subsequent growth. The significance attributed to Edo Bay is therefore not simply that foreign warships arrived, but that their arrival interacted with a domestic institutional arrangement already susceptible to challenge.

The episode forms part of the book’s wider account of institutional drift and critical junctures. Small differences between societies can accumulate without dictating a predetermined outcome; when a major disruption arrives, those differences may shape whether institutions change or persist. Edo Bay marks the moment when external pressure met Japan’s vulnerable Tokugawa order, with consequences distinct from those in neighboring China.