Insight by History

When popular revolts succeed in middling dictatorships, regime change is often driven by elites because uprisings only prevail if the military or powerful courtiers withdraw support, and those elites then replace the ruler to protect their own positions rather than enact mass reforms.

Firms cluster together because proximity lowers coordination friction with suppliers, competitors, and complementary firms, which makes collaboration and operations faster, cheaper, and more efficient.

More democratic systems tend to have lower average tax rates because broad citizen participation and many low- or non-taxpaying voters reduce average burdens, whereas autocrats can impose higher effective takes on productive citizens.

Because the power network is a shared resource, organizations and rules are required to allocate capacity, enforce operating practices, and manage access, which prevents conflicts and helps maintain stability.

Democratic leaders invest in public goods because raising citizens' productivity expands the tax base, so even with lower tax rates the absolute resources available to reward supporters and fund government increase.

Cities enable complex production because concentrated networks of thousands of specialized suppliers and workers let the many discrete inputs and processes required for goods like modern cars be coordinated far more efficiently than by isolated individuals.

In democracies, politicians reward voter blocs rather than individuals because winning requires mobilizing identifiable groups, so policies and subsidies are tailored to deliver group-specific benefits that secure votes.

Cities make wealth possible because urban concentration cuts transaction and transport frictions, boosts specialization, and accelerates knowledge spillovers, which together amplify productive activity and output.