Quite often, opponents of political restructuring say it’s not Nigeria that needs to be restructured, it’s the minds of Nigerians. In saying that, they attempt to shift the focus away from structure to culture. Similarly, some commentators say that the type of political system that Nigeria operates doesn’t matter; what really matters is the quality of leadership. According to these commentators, countries develop only on the basis of competent and patriotic leadership. But these views are utterly wrong!
Of course, culture matters and 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 behaviours and drive political, economic and social progress.
I often ask whenever anyone talks about of the culture of Nigerians as if it’s immutable: 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? Why do the same Nigerians who would never queue for anything at home always queue at Tesco and Sainsbury supermarkets, or for buses, in London? The truth is that everyone can change their behaviour depending on the incentives.
Steven Levitt and Stephen Dubner, authors of the fascinating book titled ‘Freakonomics’, probably gave the best insights on the power of incentives. They said in the book: “Incentives are the cornerstones of modern life – and understanding them is the key to solving just about any riddle”. Putting it more graphically, they added: “An incentive is a bullet, a lever, a key, an often tiny object with astonishing power to change a situation”.
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The idea here 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 traffic rules in the UK is that the incentive structures in both countries are different: the system works in Britain; it doesn’t work 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. It’s about incentives!
But the most powerful incentives that can shape human behaviour and trigger cultural change for the better are institutions, systems or structures. As one scholar puts it, humans don’t only “live culturally”, they also “live in cultures”, and thus they are subject to experiences of the socio-physical environment, to the symbolic structures that constrain, enable and guide people’s behaviour.
Of course, institutions, systems and structures themselves embody culture; after all, they emerge through a process of dialectical discourse about norms and values, which are components of culture. This is why it is important that institutions, systems and structures are underpinned by the right norms and values, otherwise they won’t work. Indeed, 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!
From the time of Adam Smith to this day, philosophers and scholars have theorised about why some countries are rich, while others are poor; why some succeed, while others fail. In his famous book ‘The Wealth of Nations’, Adam Smith put this down to the free-market economy and the system of justice and the rule of law. Countries that follow this path, Adam Smith posited, will be wealthy, while those who don’t will be poor.
The economic historian David Landes built on Adam Smith’s arguments in his own book ‘The Wealth and Poverty of Nations’, and cited many other reasons, including science and technology, why some nations are rich, and some are poor. However, Landes’s 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”. As one of many examples, he compared Indonesia and Nigeria, stating: “In 1965, Nigeria (oil exporter) had higher GDP per capita than Indonesia (another oil exporter), twenty five 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 disagreed with the culture hypothesis. While not outrightly dismissing the role of culture, such as beliefs, values and norms, they argued that it is the nature of a country’s political and economic institutions that makes the difference between success or failure. They studied several countries with the same characteristics, such as same geographical area or same culture, and found that those with the right political and economic institutions were successful, while those without such institutions were not. Simply put, countries become more or less prosperous because of different political and economic choices.
The authors distinguished between two types of institutions: inclusive and extractive. They also explained the relationship between political and economic institutions. Understanding these differences and relationships is key to understanding why nations fail or succeed, and the key lesson for Nigeria is that institutions matter and the type of institutions matters.
According to Acemoglu and Robinson, inclusive political institutions decentralise political governance; they are about the devolution of power, effective checks and balances and accountability in the exercise of centralised power. On the contrary, extractive political institutions concentrate power in the hands of a narrow elite and place few constraints on the exercise of this power. 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, while acknowledging that there is a strong synergy between economic and political institutions, the authors put a lot of emphasis on political institutions. This is because while economic institutions are critical for determining whether a country is poor or prosperous, it is politics and political institutions that determine what economic institutions a country has or adopts. Thus, a country cannot have inclusive economic institutions unless it has inclusive political institutions.
Unfortunately, Nigeria does not have inclusive political and economic institutions. Nigeria is an extractive state, where wealth and power are concentrated in the hands of powerful elite. As a result, the body politic is not empowered but utterly weakened. In a country where nobody, however competent, can overcome the structural barriers of sectional politics, monetised elections and godfatherism, to emerge as president, the political institutions can only be extractive.
That, of course, leads to extractive economic institutions. Acemoglu and Robinson gave the example of two countries, one an inclusive state, where billionaires emerge through free-market competition, and another, an extractive state, where people become billionaires through rent-seeking and crony capitalism. Nigeria is an example of the latter; it’s a country where most billionaires emerge through crony capitalism.
Yet, the truth is, as long as Nigeria remains an extractive state, it risks becoming a failed state. That’s why this country 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 political system matters. Take another empirical study, covering 119 countries. Richard McManus and Gulcin Ozkan found that parliamentary systems produce superior economic outcomes than presidential systems. That’s because parliamentary systems have the attributes of inclusive institutions, such as checks and balances and accountability. So, the nature of a country’s governance structure matters.
But what about leadership? That matters hugely too. 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, so far, Nigeria has had no great leader!
