E09 — Reversing Development: Spice, Genocide, and Slavery

Can global trade and exploration drive poverty instead of prosperity? In this episode of Why Nations Fail — A Deep Dive into Acemoglu & Robinson’s Theory, we unpack Chapter 9, which reveals how European expansion didn’t just reshape the world — it reversed development in many regions. Focusing on the Dutch colonization of the Moluccas, the transatlantic slave trade in Africa, and the rise of a dual economy in South Africa, the authors argue that colonialism often imposed or reinforced extractive institutions that stifled local development. Violence, forced labor, and racial segregation were not side effects — they were deliberate tools to entrench inequality and maintain control. This chapter illustrates how external forces created systems that served European interests while locking local populations into poverty.