I stand corrected. I failed to take into account the effectiveness and efficiency of modern weapons. They assign disproportionate power to the top of the thugocracy (Saddam Hussein being an extreme example). Such a thugocracy can propagate itself brutally, suppressing the trickling down of wealth and development.
The question that follows (and that I honestly don't know the answer to) is whether the invention of modern weapons was a historical tipping point that obliterated previous routes of national economic development. What if mechanized warfare had been invented before the rise of the West by a non-Western civilization and transferred (via trade) to the medieval European feudal lords. Would they have allowed the rise of the middle class in the West the way it did?
"The West won the world not by the superiority of its ideas or values or religion, but rather by its superiority in applying organized violence. Westerners often forget this fact, non-Westerners never do" -- Samuel Huntington. The Clash of Civilizations and the Remaking of World Order, p. 51.