Today’s twenty-first-century authoritarians crave the type of legitimacy that only the law can provide. For regimes that seek to mask their true nature behind a democratic facade, the law is one of the most powerful weapons they can wield. It offers the government the pretense it requires to accomplish its aims, all without stepping out of the shadows. Thus, if you seek to disband an NGO, you don’t arrest its membership. You send health inspectors to temporarily close its headquarters, pending a review of a series of alleged health code violations. If you are troubled by what a radio station is broadcasting, you don’t have the Ministry of Telecommunication force it off the airwaves. Rather, you send tax inspectors to audit the station’s books and find financial irregularities that require the station’s temporary closure. In fact, even this step may be unnecessary. The mere threat of legal sanctions or administrative review may encourage the radio station’s management to engage in the very self-censorship that accomplishes the regime’s ends—all without ever inflicting the punishment. Law, regulation, and procedure can be a dictator’s most effective tools for strangling an opponent, precisely because these weapons appear to be benign, apolitical, and objective.
— The Dictator’s Learning Curve: Inside the Global Battle for Democracy
What is crucial, however, is that growth under extractive institutions will not be sustained, for two key reasons. First, sustained economic growth requires innovation, and innovation cannot be decoupled from creative destruction, which replaces the old with the new in the economic realm and also destabilizes established power relations in politics. Because elites dominating extractive institutions fear creative destruction, they will resist it, and any growth that germinates under extractive institutions will be ultimately short lived. Second, the ability of those who dominate extractive institutions to benefit greatly at the expense of the rest of society implies that political power under extractive institutions is highly coveted, making many groups and individuals fight to obtain it. As a consequence, there will be powerful forces pushing societies under extractive institutions toward political instability.