Oh, that's easy. I choose #3

3: The top of the economic ladder reacts to worsening conditions by switching from promoting riskier growth based economic policies from which they might glean opportunities from new wealth, to allowing only status-quo reaffirming policies in an attempt to protect their already aggregated wealth and positions of economic power.

This leads to worsening economic and social conditions for all non-elite parts of the population, as their economic and social issues are left unaddressed and thereby worsen under the status-quo.

This leads to more pressure for the body politic to act to solve those problems, but as the top of the economic ladder now only endorses policies that support the status quo, a new political movement will need to grow that focuses only on stagnating and blocking any attempt for the government to act. All proposed reforms that allow the government to act for the benefit of the masses are blocked, all existing abilities of the government to help the masses are hollowed.

This worsens economic and social conditions, which then means this becomes a catch-22.

The political entities that are responsible for this dynamic, out of quiet guilt, instead begin lauding themselves that their actions are not the cause of worsening conditions for the masses, but are instead the realization of the representation of the ideological soul of their nation. This leaves these individuals intentionally deaf to the possibility that they might be wrong, and further reinforces their inability to compromise or present solutions that would challenge the current status-quo. This also becomes a catch-22, and can reach the point of fetishization. It also increases the tendency of this political class to promote policies that are ideologically driven political projects that hurt the country economically, because they fundamentally arise from a position that large parts of the population are not true citizens and deserve punishment.

If this trend continues unchecked, as things continue to worsen, merely rendering government unresponsive becomes insufficient. So it results in the election of strong-men type characters that sell themselves to the populace as being the only ones capable of breaking the political deadlock that prevents solutions to issues within the country, while simultaneously promising to their richest funders that they will actually use their power to further entrench the positions and wealth of the existing economic elite.

This creates a new group of politicians that seek power for themselves by exploiting this new dynamic, where they compete by their willingness to break cultural norms in order to service these two groups, and much later, a reactionary progressive cadre that functions similarly on the opposing side.

This new dynamic worsens the economic and social issues at play, as the crumbling competency of hollowed out social norms and institutions lose their ability to function as effectively for the mass populace until the standard of living has fallen sufficiently to match the capabilities of the country to support it, and an increasingly deaf and authoritarian political class is far less effective at managing the needs of the people than in the previous more-decentralized state. Quality of life continues to drop, either slowly over time, or violently.

At this point, the new political class will consider usurping power and wealth from the rich elite, as there are no longer legal norms to constrain them.

Regardless, with decreased capacity in an ill functioning state, where the new political elite has acquired power by servicing an elite class focused on maintaining wealth instead of driving growth in the nation, the country loses its ability to compete economically with rival nations, and begins falling further and further behind, thereby worsening the above cycle.

But what you have to remember, is its all worth it, because the alternative includes potential taxes, promoting policies to raise wages, or reinvesting in your fellow countrymen, and those things are all worse than what I just described /s