Political centralization can lead to extractive institutions from "summary" of Why Nations Fail by Daron Acemoglu,James A. Robinson
Political centralization can be a double-edged sword. On one hand, it can promote economic growth and development by establishing law and order, infrastructure, and public services. However, on the other hand, it can also lead to the creation of extractive institutions. When power is concentrated in the hands of a few individuals or a single entity, there is a high risk of abuse of power. This can result in the creation of institutions that are designed to extract resources from the majority of the population for the benefit of the ruling elite.
In extractive institutions, the political and economic systems are designed to serve the interests of a narrow group of people, often at the expense of the broader population. This can lead to widespread poverty, inequality, and social unrest.
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