decline continued after Mobutu was overthrown by Laurent
Kabila. Mobutu created a highly extractive set of economic
institutions. The citizens were impoverished, but Mobutu
and the elite surrounding him, known as Les Grosses
Legumes (the Big Vegetables), became fabulously wealthy.
Mobutu built himself a palace at his birthplace, Gbadolite,
in the north of the country, with an airport large enough to
land a supersonic Concord jet, a plane he frequently rented
from Air France for travel to Europe. In Europe he bought
castles and owned large tracts of the Belgian capital of
Brussels.
Wouldn’t it have been better for Mobutu to set up
economic institutions that increased the wealth of the
Congolese rather than deepening their poverty? If Mobutu
had managed to increase the prosperity of his nation,
would he not have been able to appropriate even more
money, buy a Concord instead of renting one, have more
castles and mansions, possibly a bigger and more
powerful army? Unfortunately for the citizens of many
countries in the world, the answer is no. Economic
institutions that create incentives for economic progress
may simultaneously redistribute income and power in such
a way that a predatory dictator and others with political
power may become worse off.
The fundamental problem is that there will necessarily be
disputes and conflict over economic institutions. Different
institutions have different consequences for the prosperity
of a nation, how that prosperity is distributed, and who has
power. The economic growth which can be induced by
institutions creates both winners and losers. This was clear
during the Industrial Revolution in England, which laid the
foundations of the prosperity we see in the rich countries of
the world today. It centered on a series of pathbreaking
technological changes in steam power, transportation, and
textile production. Even though mechanization led to
enormous increases in total incomes and ultimately
became the foundation of modern industrial society, it was
bitterly opposed by many. Not because of ignorance or
shortsightedness; quite the opposite. Rather, such
opposition to economic growth has its own, unfortunately
coherent, logic. Economic growth and technological
change are accompanied by what the great economist