As I have previously described, most developed countries have large central governments with a high degree of centralized decision-making. That is complemented by a high degree of concentration in the economy, with a few firms dominating most industries. Both of these things are bad for the knowledge loop, as they inhibit experimentation. A recent example of this was illustrated by the response to COVID-19. In the US, testing was largely federally controlled, making it difficult to execute a differentiated state-level response. Even a state the size of California, which on a standalone basis would be the world’s sixth largest economy, was unable to approve rapid tests developed by California-based startups (Haverstock, 2020).