Similarly, inclusive economic institutions will neither
support nor be supported by extractive political ones. Either
they will be transformed into extractive economic
institutions to the benefit of the narrow interests that hold
power, or the economic dynamism they create will
destabilize the extractive political institutions, opening the
way for the emergence of inclusive political institutions.
Inclusive economic institutions also tend to reduce the
benefits the elites can enjoy by ruling over extractive
political institutions, since those institutions face
competition in the marketplace and are constrained by the
contracts and property rights of the rest of society.
W HY N OT A LWAYS C HOOSE P ROSPERITY ?
Political and economic institutions, which are ultimately the
choice of society, can be inclusive and encourage
economic growth. Or they can be extractive and become
impediments to economic growth. Nations fail when they
have extractive economic institutions, supported by
extractive political institutions that impede and even block
economic growth. But this means that the choice of
institutions—that is, the politics of institutions—is central to
our quest for understanding the reasons for the success
and failure of nations. We have to understand why the
politics of some societies lead to inclusive institutions that
foster economic growth, while the politics of the vast
majority of societies throughout history has led, and still
leads today, to extractive institutions that hamper economic
growth.
It might seem obvious that everyone should have an
interest in creating the type of economic institutions that will
bring prosperity. Wouldn’t every citizen, every politician,
and even a predatory dictator want to make his country as
wealthy as possible?
Let’s return to the Kingdom of Kongo we discussed
earlier. Though this kingdom collapsed in the seventeenth
century, it provided the name for the modern country that
became independent from Belgian colonial rule in 1960. As
an independent polity, Congo experienced almost
unbroken economic decline and mounting poverty under
the rule of Joseph Mobutu between 1965 and 1997. This