5.1 Introduction

Focusing on intra-elite relationships within the dominant coalition follows directly on the logic of the natural state. However, as an answer to the question of why elites give up their privileges, it differs fundamentally from the emphasis of modern economics and political science. Acemoglu and Robinson’s Economic Origins of Dictatorship and Democracy (2006) presents innovative, state-of-the-art thinking about the transition process and serves as a useful point of comparison to our approach. They formulate the transition question in terms of democracy:

To starkly illustrate our framework, consider a society in which there are two groups: an elite and the citizens. Nondemocracy is rule by the elite; democracy is rule by the more numerous groups who constitute the majority – in this case, the citizens. In nondemocracy, the elite get the policies it wants; in democracy, the citizens have more power to get what they want. Because the elite loses under democracy, it naturally has an incentive to oppose or subvert it; yet, most democracies arise when they are created by the elite.

This approach raises a puzzle: if democracy brings a shift of power in favor of the citizens, why would the elite ever create such a set of institutions (Acemoglu and Robinson, 2006, p. xi)? This question provides the framework for Acemoglu and Robinson’s powerful and sophisticated analytical framework of the transition.

Characterizing Acemoglu and Robinson’s framework as a more subtle version of a single-actor state model oversimplifies their approach, but does no fundamental injustice to their method. They focus on elites and non-elites and ask when elites find it in their interest to concede power to non-elites. Their answer, unfairly simplified, is that elites concede power when they fear they will lose it anyway and believe they will lose less by concession than through revolution. Much of Acemoglu and Robinson’s sophistication lies in demonstrating how elite promises to share power with non-elites are made believable through democratic reforms, a concern we share.

We come at the same problem from a different perspective. In natural states, elites are not a unified group, but are composed of disparate groups that compete and cooperate, and sometimes go to war against each other. Because they are not unified, elites cannot intentionally decide to do anything, let alone decide to share power. Members of the dominant coalition are rarely so unified.

Consistent with the logic of the natural state, open access emerges as a solution to the existing problem of structuring relationships within the dominant coalition to ensure order. The first step occurs when some elites find

that moving to more impersonal relations makes them better off without threatening the stability of the coalition. As conditions allowing impersonal relations among elites are created, elites may find it in their interests to secure their impersonal privileges through formal institutions, such as legislation, a legal system, and the extension of citizenship. Giving all elites the same privilege transforms that privilege into a right.

5.2 Personality and Impersonality: The Doorstep Conditions

Any explanation of the transition must begin with societies that are natural states. This imposes three specific logical requirements:

1.The institutions, organizations, and behavior of individuals in place at the beginning of the transition must be consistent with the logic of the natural state.

2.Changes in institutions, organizations, and behavior that occur during the transition must be consistent with the interests of members of the dominant coalition (but the results of those changes may be unintended).

3.The transition must occur in historical time through a series of reinforcing changes in institutions, organizations, and individual behavior such that incremental increases in access are sustained by the existing political and economic systems at each step along the way.

While all natural states create rents through personal privileges, natural states can support impersonal characteristics as well. In English land law, freeholder was an impersonal category based on land tenure that granted all freeholders the right to use the king’s courts and, if they possessed enough land, the right to vote. The impersonal category of freeholder was embedded in a system where the rights of the tenants in chief were personal.

Natural states are dynamic and their internal structures undergo regular if episodic change. Regimes and dynasties rise and fall, relative prices adjust, climates fluctuate, neighboring competitors appear and disappear, and boundaries and borders shift. The wide variety of possible forms that can be taken by political and economic systems within a natural state produce different economic and political outcomes. Out of these shifting patterns, societies occasionally produce arrangements with a better chance of initiating the transition to open access. Historically in the West, societies in Athenian Greece, Republican Rome, and the Renaissance city-states of Northern Italy appear to have been on the doorstep of the transition, although all three failed to produce open access societies. All three societies

are celebrated in Western history, and all managed to create an impersonal identity for elite members of the governing coalition: citizen.

Three facets of natural state societies are necessary to sustain impersonal relationships among elites. We call these the doorstep conditions because once the doorstep conditions are in place it is possible, but not inevitable, for impersonal relationships among elites to generate incentives to open access in the polity and economy.

The three doorstep conditions are:

DC #1. Rule of law for elites.

DC #2. Perpetually lived organizations in the public and private spheres. DC #3. Consolidated control of the military.

Historically, the doorstep conditions built on one another in the first societies to move to open access. The creation of perpetually lived organizations for elites grew out of rule of law for elites. The creation of consolidated control over the military involved both elite rule of law and elite perpetually lived organizations. All three conditions are necessary to establish extensive impersonal exchange among elites. It is not clear, however, that the historical order of development is necessary.

DC #1) Rule of law for elites. The dominant coalition in every natural state is an adherent organization, a group of individuals bound together by mutual interests and threats. Their constant interaction inevitably gives rise to the possibility of regularizing behavior through rules, both informal and formal, governing specific relationships among the elite. Adjudicating disputes among elites is a fundamental part of sustaining relations among elites. All natural states accomplish this by identifying procedures for arbitration and mediation functions. In some natural states, these functions become formalized into a machinery of government and justice. As we stressed earlier, the origin of property rights and legal systems is the definition of elite privileges in the natural state.

Rule of law requires the establishment of a judicial system in which individuals with the appropriate standing have access to rules and procedures (usually including courts or bureaucracies) whose decisions are binding and unbiased, at least with respect to elites.1 Rule of law is not, of course,

1We mean unbiased in the sense that the laws are applied fairly, not that the laws are fair. Natural state legal systems typically distinguish among different individuals on the basis of status; as we have seen, rule of law for elites in a natural state does not imply that all