# kaal:claim:3808873-011

**Claim.** Centralization follows an S curve: in the expansion phase the benefits of centralizing power, capital and control rise faster than its costs, but in the decline phase the rising costs of centralization, including corruption, diseconomies of scale and cronyism, can no longer be offset, so centralized systems function less optimally and less efficiently.

**Type.** mechanism  **Support.** argued

**Holds when.**

- centralized systems in business and society over their life cycle

**Source quote.**

> Because of the increase in the cost of centralization, the benefits of centralization can no longer offset and outweigh the cost. As a result, centralized systems function less optimally and less efficiently.

**From.** Wulf A. Kaal, *Decentralization Neutralizers* (2021), III. S-Curve of Centralization, page 9

**Cite as.** Wulf A. Kaal, Decentralization Neutralizers (2021). SSRN: https://ssrn.com/abstract=3808873

**Verify.** sha256 of source PDF `f11493915e6b8c266d421510b5546816e33defb5650aac9d09b20d78549da727` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202021%20-%20Decentralization%20Neutralizers.pdf

**Failure mode.** Centralization S Curve Decline  (family: recentralization-drift)

**Topics.** decentralization, economics

**Keywords.** s-curve, centralization, corruption, efficiency, diminishing-returns

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