Why Nations Fail

by

Daron Acemoglu and James A. Robinson

Vicious Circle Term Analysis

The vicious circle is the cycle by which extractive institutions reinforce themselves over time—or even get worse—because they give elites the wealth and power they need to build even more extractive institutions. It’s the opposite of the virtuous circle.

Vicious Circle Quotes in Why Nations Fail

The Why Nations Fail quotes below are all either spoken by Vicious Circle or refer to Vicious Circle. For each quote, you can also see the other terms and themes related to it (each theme is indicated by its own dot and icon, like this one:
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).
Chapter 12 Quotes

Sierra Leone’s development, or lack thereof, could be best understood as the outcome of the vicious circle. British colonial authorities built extractive institutions in the first place, and the postindependence African politicians were only too happy to take up the baton for themselves. The pattern was eerily similar all over sub-Saharan Africa. There were similar hopes for postindependence Ghana, Kenya, Zambia, and many other African countries. Yet in all these cases, extractive institutions were re-created in a pattern predicted by the vicious circle—only they became more vicious as time went by. In all these countries, for example, the British creation of marketing boards and indirect rule were sustained.

Related Characters: Daron Acemoglu and James A. Robinson (speaker)
Related Symbols: The Sierra Leone Railway
Page Number: 343
Explanation and Analysis:

This form of the vicious circle, where extractive institutions persist because the elite controlling them and benefiting from them persists, is not its only form. […] In a form that the sociologist Robert Michels would recognize as the iron law of oligarchy, the overthrow of a regime presiding over extractive institutions heralds the arrival of a new set of masters to exploit the same set of pernicious extractive institutions.

The logic of this type of vicious circle is also simple to understand in hindsight: extractive political institutions create few constraints on the exercise of power, so there are essentially no institutions to restrain the use and abuse of power by those overthrowing previous dictators and assuming control of the state; and extractive economic institutions imply that there are great profits and wealth to be made merely by controlling power, expropriating the assets of others, and setting up monopolies.

Related Characters: Daron Acemoglu and James A. Robinson (speaker)
Page Number: 365-366
Explanation and Analysis:
Chapter 13 Quotes

Nations fail economically because of extractive institutions. These institutions keep poor countries poor and prevent them from embarking on a path to economic growth. […] The basis of these institutions is an elite who design economic institutions in order to enrich themselves and perpetuate their power at the expense of the vast majority of people in society. The different histories and social structures of the countries lead to the differences in the nature of the elites and in the details of the extractive institutions. But the reason why these extractive institutions persist is always related to the vicious circle, and the implications of these institutions in terms of impoverishing their citizens are similar—even if their intensity differs.

Related Characters: Daron Acemoglu and James A. Robinson (speaker)
Page Number: 398-399
Explanation and Analysis:
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Vicious Circle Term Timeline in Why Nations Fail

The timeline below shows where the term Vicious Circle appears in Why Nations Fail. The colored dots and icons indicate which themes are associated with that appearance.
Chapter 11: The Virtuous Circle
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...limits—to consolidate his power. Like many Latin American countries, Argentina has been stuck in a vicious circle , not a virtuous one. In contrast, the US’s inclusive institutions have kept the Supreme... (full context)
Chapter 12: The Vicious Circle
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Ultimately, as throughout Africa, the vicious circle of extractive institutions has impoverished Sierra Leone and prevented it from developing. Colonial elites built... (full context)
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...economy didn’t start growing significantly until after the civil rights movement. Until that time, its vicious circle was similar to Guatemala’s: the entrenched elite built extractive economic institutions for its own benefit,... (full context)
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Just like in Sierra Leone, Guatemala, and the US South, the same vicious circle kept recreating extractive institutions in Ethiopia. Sociologists call this “the iron law of oligarchy.” New... (full context)
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...no local institutions or independent businesspeople could check government power. Therefore, in these countries, the vicious circle continued. (full context)
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Acemoglu and Robinson summarize the last two chapters under the heading “Negative Feedback and Vicious Circles .” Inclusive institutions tend to become more inclusive over time, in a virtuous circle. Pluralism... (full context)
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Guatemala is a good example of how the vicious circle can keep the same elite in power for centuries. And the US South shows how... (full context)
Chapter 13: Why Nations Fail Today
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...government centralization and public services, especially in rural areas. This continues in a kind of vicious circle because national politicians, like Álvaro Uribe (who was president from 2002 to 2010), win over... (full context)
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Most importantly, every country with extractive institutions today has been stuck in the vicious circle since the 19th century. Fixing failed nations requires breaking the circle and creating inclusive institutions... (full context)
Chapter 14: Breaking the Mold
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...1955. Acemoglu and Robinson explain that the civil rights movement finally broke the US South’s vicious circle of extractive institutions, which kept it much poorer than other parts of the country. The... (full context)
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...Revolution, and Meiji Restoration) prove “that history is not destiny.” It’s possible to escape the vicious circle of extractive institutions—it’s just very difficult. Apart from luck, it requires a broad political coalition... (full context)
Chapter 15: Understanding Prosperity and Poverty
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Extractive political and economic institutions reinforce each other in a vicious circle , while inclusive ones do the same in a virtuous circle. These circles are strong,... (full context)
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...institutions into inclusive ones. Often, these attempts can fizzle out or backfire because of the vicious circle . However, this book can help leaders identify bad policies that won’t work because they’re... (full context)