Nigeria

By Olu Fasan

MANY times, opponents of political restructuring say it’s not Nigeria that should be restructured, it’s the minds of Nigerians. They attempt to shift the emphasis away from structure to culture. Similarly, some commentators say that the type of political system doesn’t matter, what matters is the quality of leadership! They are all wrong! 

Of course, culture matters;  leadership matters. But empirical studies around the world show that it is the right institutions, the right governance structure, the right political system that shape behaviour and drive political and economic progress.

Whenever anyone talks about the culture of Nigerians as if it’s immutable, a few questions often come to my mind: Why do the same Nigerians who drive recklessly in Lagos obey traffic rules in London or New York?

Why do the same Nigerians who behave rowdily at Murtala Muhammed International Airport act orderly at Heathrow Airport in London or JF Kennedy International Airport in New York? I used the words “the same Nigerians” to make the point that the same person can change his or her behaviour depending on the incentives.

The best insight on incentives arguably came from Steven Levitt and Stephen Dubner, authors of the fascinating book Freakonomics. They said: “Incentives are the cornerstones of modern life – and understanding them is the key to solving just about any riddle”. They then added: “An incentive is a bullet, a lever, a key; an often tiny object with astonishing power to change a situation”. 

Well, the idea is that if you change the incentives that people face, you will change their behaviour. For instance, the reason a person would drive recklessly in Nigeria but obey the traffic rules in the UK is that the incentive structures in both countries are different: the system works in Britain; it doesn’t in Nigeria. And so, while the person can get away with behaving badly in Nigeria, he can’t in the UK. The same logic applies to any other human behaviour, including corruption!

So, it follows that the most powerful incentives that can shape human behaviour and trigger cultural change for the better are the right institutions, systems or structures.

As one scholar puts it, humans don’t only “live culturally”, they also “live in cultures”, and are subject to symbolic structures that constrain, enable and guide people’s behaviour. Indeed, institutions, systems and structures themselves embody culture; they emerge through a process of dialectical discourse about norms and values, which are components of culture.

This is why institutions, systems and structures must be underpinned by the right norms and values, otherwise they won’t work. For any institution or system to endure, it must be so grounded in values that it can trigger cultural transformation in society and not be undermined by those living culturally in a bad way!

In his book, The Wealth and Poverty of Nations, the economic historian David Landes cite many reasons why some nations are rich, and some are poor. But his overarching argument is that culture matters. As he put it: “If we learn anything from the history of economic development, it is that culture makes all the difference”.

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He compared Indonesia and Nigeria, stating: “In 1965, Nigeria (oil exporter) had higher GDP per capita than Indonesia (another oil exporter), 25 years later, Indonesia had three times the Nigerian level”. Why? Cultural differences: values, norms, etc!

But in their best-selling book, Why Nations Fail, Daron Acemoglu and James Robinson took issue with the culture hypothesis. To them, it’s about the right political and economic institutions.  They studied several countries that had the same characteristics, such as same geographical area or same culture, and found that those that had the right political and economic institutions were politically, economically and socially successful, while those without such institutions were not.

Countries, they argued, become more or less prosperous because of different political and economic choices; the right choices create the incentives that generate prosperity.

Now, the lessons for Nigeria are about the type of institutions that cause a nation to succeed or fail. Acemoglu and Robinson described two types of institutions: inclusive and extractive. Inclusive political institutions ensure the distribution and devolution of power, effective checks and balances and accountability in the exercise of centralised power, while extractive institutions overcentralise power, captured by vested interests. Inclusive economic institutions ensure that wealth and the means of attaining wealth are democratised and widely spread. By contrast, extractive economic institutions concentrate wealth in few hands.

 Crucially, the authors argued that the existence of inclusive economic institutions is not possible without inclusive political institutions, so political institutions matter hugely.

Sadly, Nigeria lacks inclusive political and economic institutions. It’s an extractive state where wealth and power are concentrated in few hands. As a result, the body politic is not empowered but utterly weakened.

In the US, an inclusive state, billionaires emerge through a competitive free-market economy; in Nigeria, an extractive state, they largely emerge through crony capitalism. But the greatest insight from Why Nations Fail is that inclusive political and economic institutions cause states to succeed, while extractive political and economic institutions cause states to fail.

 And truth is, as long as Nigeria remains an extractive state, it faces risks of state failure. That’s why Nigeria must be restructured to become an inclusive nation, so that it can escape state failure and achieve political, economic and social progress.

So, the type of institution, system and structure matters. For instance, another empirical study, conducted by Richard McManus and Gulcin Ozkan, covering 119 countries from 1950 to 2015, found that parliamentary systems produce superior economic outcomes than presidential systems because they have the attributes of inclusive institutions, such as checks and balances and accountability.

What about leadership? Of course, it matters hugely. But great leaders need great institutions to succeed. Indeed, as Professors Paul Collier and Tim Besley put it: “Good leaders change policies, but great leaders build institutions”. Sadly, Nigeria hasn’t had a great leader yet!

Vanguard News Nigeria

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