Institutional persistence

Institutional persistence is the tendency of political and economic arrangements to endure because institutions reinforce one another and those who benefit from them can resist change. In the book’s account, this endurance is powerful but not inevitable: gradual institutional drift shapes how societies respond to disruptive events, while inclusive institutions can also generate a virtuous circle that helps protect and deepen them.

How institutions endure

Extractive political and economic institutions can support one another in a vicious circle. Political power enables a narrow group to secure economic advantages, while those advantages help it defend its political position. Because the beneficiaries of the status quo are often wealthy and organized, they can obstruct changes that threaten their privileges. Extractive arrangements may produce some growth where the state has sufficient centralization, but the book argues that this growth is unlikely to last: elites resist innovation when creative destruction threatens established economic and political relations, and competition for concentrated power encourages instability.

This account treats persistence as a feedback process rather than a simple survival of old rules. Institutional arrangements shape who gains from economic activity and who can influence political decisions; the resulting distribution of resources and power then helps reproduce those arrangements. Yet the feedback is not absolute. Some societies have moved away from extractive institutions, and their transitions depend on how inherited institutions meet new circumstances.

Drift and critical junctures

Institutional differences may begin small and accumulate through conflict over income, power, and the rules governing society. This process, called institutional drift, has no fixed or predetermined direction. Differences can grow, fade, or reappear. Their importance becomes especially visible when a critical juncture disrupts an existing political or economic balance: societies with different institutional starting points may respond to the same upheaval in markedly different ways.

The Black Death illustrates this divergence. In Western Europe, where peasants had relatively more power and autonomy, the disruption helped dissolve feudalism. In Eastern Europe, where lords were better organized and peasants less so, it contributed to the Second Serfdom. Atlantic trade likewise created new opportunities whose effects depended on prior institutional differences. In England, the Crown could not control all overseas trade, enabling wealthy traders with limited ties to the Crown to gain influence and contest royal prerogatives. In France and Spain, monarchies and their allies captured more of the gains. These contrasts show how institutional persistence can shape responses to change without dictating them in advance.

Law, enforcement, and constraints on power

Persistence also depends on whether institutions constrain powerful actors in practice, rather than merely stating rules on paper. The book contrasts Mexico’s recurso de amparo, a petition that can be used to argue that a law does not apply to the petitioner, with the rule-of-law ideal that laws apply equally. Although the amparo originated as a safeguard for rights under the Mexican constitution of 1857, Telmex and other monopolies used it to challenge efforts to limit their power. Regulatory attempts to curb Telmex’s monopoly therefore came to little, illustrating how legal procedures may help preserve economic privilege when enforcement is uneven.

England’s Black Act offers a contrasting example of limits on elite power. The harsh law targeted people accused of offenses including deer theft, but the prosecution of local resident John Huntridge ended in acquittal after an eight- or nine-hour trial; irregularities in the collection of evidence contributed to the jury’s decision. The law remained on the statute books until 1824, and many others were hanged or transported, so the acquittal did not erase its severe consequences. But it showed that the Whig authorities could not simply secure a conviction by command. In the book’s interpretation, the rule of law—strengthened after the Glorious Revolution—constrained elites as well as ordinary people and made arbitrary enforcement harder to sustain.

That constraint could itself become self-reinforcing. If the law applied equally, neither powerful figures such as Robert Walpole and William Cadogan nor common people accused of trespassing on private property stood above it. Suspending those protections against ordinary people risked weakening the broader balance that also protected merchants, businessmen, and the gentry against arbitrary Crown power. The resulting virtuous circle helped preserve pluralism and the rule of law, while creating pressure for wider participation.

Uneven persistence and historical outcomes

The book’s examples show that institutional persistence takes different forms. In Somalia, broadly distributed political power did not produce inclusive institutions because there was no centralized authority able to enforce even minimal law and order. Customary arrangements, including informal councils of adult men and heer obligations within diya-paying groups, structured collective decisions and obligations, but lacked a state capable of reliably enforcing law across society. The example distinguishes dispersed power from pluralism supported by effective public authority.

Argentina demonstrates another form of persistence: elections coexisted with concentrated political power and weak constraints on governing elites. The Perónist Party built support through vote buying, patronage, and the exchange of government contracts and jobs for political backing. When the labor movement that had served as its political base weakened under military repression in the 1970s and 1980s, the party shifted toward buying votes from other groups. President Menem later rewrote the constitution to remove the term limit that barred his reelection. The book also points to El Corralito as an example of a government overriding property rights, underscoring that elections alone do not ensure pluralism or protect citizens from arbitrary state action.

Together, these cases make institutional persistence a historical explanation, not a claim that societies are trapped in an unalterable past. Existing arrangements constrain and shape later choices, but conflict, contingent outcomes, and critical junctures can alter the path. The key distinction is between endurance backed by concentrated power and persistence sustained by institutions that constrain power and permit a broader coalition to participate.