Underdevelopment is often described as a coordination failure (pp. 165-168). Accordingly, an autocratic government (e.g., Iran andNorthKorea) prefers to keep its country in an underdevelopment trap. Such a government knows well that as its economy develops, it will lose power. To stay in power, the government implements policies that cause human and financial capital flight and hinders domestic and foreign investment, all of which perpetuate underdevelopment.

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