Why Nations Fail: A depressing read that ought to be a reference book for Congolese politicos

D., the mother of my daughter Elikia, was in Kinshasa this past week

on a business trip.





Having read and re-read all the books I'd brought with me in Kinshasa

from the Boston and Washington over the years, I am desperate for

reading materials, as you can imagine, in a city that has no bookshops

or libraries to speak of.





I was hoping to get from D. maybe one or two novels she'd have carried

in her hand luggage. I got instead tons of books--mostly fantasy and

sci-fi trilogies--downloaded from her Amazon/Kindle account directly

into my PC Kindle virtual library (I still don't have an iPad yet).

With Kinshasa's fickle electricity, it's slow reading indeed.





My reading habit is eclectic: I can jump from, say, Niall Ferguson's

The Ascent of Money to a volume of Harry Potter. In the Kindle batch I

got, I started with Suzanne Collins's The Hunger Games Triology for

two obvious reasons: the phenomenal box office the movie version

grossed; and the imprecations it triggered in a memorable movie review

in The New Yorker.





But there's a book D. wanted me to read straightaway: Daron Acemoglu

and James A. Robinson's "Why Nations Fail: The Origins of Power,

Prosperity, and Poverty."





Reading the book now--I am currently on page 84 where the historical

example is the DRC, or rather from the Kingdom of Kongo to present-day

post-Mobutu Congo--I realize I wasted my time with The Hunger Games.

I should have started with this seminal work. And if you haven't

purchased this book yet, do the right thing: do it now! It's a

collection and reference book...





This book simply reads like a thriller--what with the treasure-trove

of (often maddening) historical details the authors harness to sustain

their convincing arguments.





The gist of the book is quite simple: a historical qua political

determinism accounting for the "lay of the land" of prosperity and

poverty in today's world.





The authors give short shrift of "theories that don't work," but which

for too long have bamboozled people in trying (and failing) to explain

income and prosperity disparities in the world: 1) the Geography

Hypothesis (Montesquieu, Jeffrey Sachs, Jared Diamond)); 2) the

Culture Hypothesis (Max Weber's "Protestant ethic" for example); or 3)

the Ignorance hypothesis (Lionel Robbins and his economist followers).





If all these theories or hypotheses fail to explain anything, it's

because they can't account for the enduring "institutional legacy" the

mutually exclusive "extractive and inclusive political institutions"

have in determining the prosperity or the poverty of a given nation.

In other words, extractive political institutions beget extractive

economic institutions; and inclusive political institutions beget

inclusive economic institutions.





In the words of the authors,





"To be inclusive, economic institutions must feature secure private

property, an unbiased system of law, and a provision of public

services that provides a level playing field in which people can

exchange and contract; it also must permit the entry of new businesses

and allow people to choose their careers" (74).





Whereas the authors call the opposite of inclusive economic institutions,





"extractive economic institutions [...] because such institutions are

designed to extract incomes and wealth from one subset of society to

benefit a different subset" (76).







This is a radical departure from the newspeak of economic good

governance that is the current ideology of the World Bank and the

International Monetary Fund. Why Nations Fail would also either

invalidate--or validate (a near impossibility in the case of the DRC

(see below)--out of hand so-called elite-centered economic development

projects.







The radical departure here is the precedence political choices (made

by the elites of a nation) take over economic factors in determining

the path to prosperity or to poverty.





And the authors back up their theory with convincing examples: from

Nogales, Arizona (USA) vs. Nogales, Sonora (Mexico); to other examples

worlwide; and down to us here at ground zero of poverty in the Congo,

from the Kingdom of Kongo to post-Mobutu DRC, etc.





In the particular case of the Congo, the Kingdom of Kongo (and its

king Nzinga a Nkuwu) made contact with the Portuguese as early as

1483. The King therafter converted to Catholicism and was introduced

to Western technologies of the wheel and the plow.





But the Kongolese king chose another Western technology instead: the

gun--in order to engage in the lucrative business of slavery:





"The real reason why the Kongolese did not adopt superior technology

was because they lacked any incentives to do so. They faced a high

risk of all their output being expropriated and taxed by the

all-powerful king, whether or not he had converted to Catholicism. In

fact, it wasn't only their property that was insecure. Their continued

existence was held by a thread. Many of them were captured and sold as

slaves--hardly the environment to encourage investment to increase

long-term productivity. Neither did the king have incentives to adopt

the plow on a large scale or to make increased agricultural

productivity his main priority: exporting slaves was so much more

profitable" (60).





The colonial political system came along the same extractive line.





In the case of Congo's Mobutu and post-Mobutu regimes, the authors

point to the impossibility of simultaneity of (or synergy between)

extractive political institutions and inclusive economic institutions

within the same state formation: one set of those has to give:





"Wouldn't it have been better for Mobutu to set up economic

institutions that increased the wealth of Congolese rather than

deepening their proverty? If Mobutu had managed to increase the

prosperity of his nation, would he not have been able to appropriate

even more money, buy 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" (83).





As I said, I am still reading the book. But so far, in light of the

theory expounded in Why Nations Fail, the current Congolese political

spiel of "Modernity Revolution" (that would propel the DRC among

emergent economies) sounds hollow to me.





For that kind of revolution to occur, the authors of Why Nations Fail

argue, you need a Weberian strong and centralized State (having the

proverbial "monopoly of legitimate violence") that would impose

uniform constraints, rights, duties, and law upon all citizens

(strong and enduring inclusive political institutions, that is, where

accountability is measurable by citizens' votes that could kick out

politicians from office); and an overnight obliteration of a system

where racketeering elites have so far thrived unimpeded and with total

impunity in the surrounding ocean of universal squalor.





Do Congolese elites have any incentives for what would amount to a

collective mass suicide? I don't think so.





Why Nations Fail is indeed a very depressing read here in Kinshasa...