Nigeria's leading finance and market intelligence news report.

What do we understand by institutions?

When President Obama, on his first trip to Africa, made the point that what Africa needed most were strong institutions and not strong men, many Nigerians quickly agreed with him. Since then, the need for strong institutions have become a singsong in Nigeria as columnists, analysts and academics expend valuable time and space showing why Nigeria cannot develop without strong institutions. I can remember only one individual – Professor Ibrahim Gambari – a former Head of the United Nations’ African Union Mission in Darfur, disagreed with Obama. For Gambari, to sustain democracy in Africa, not only strong institutions were needed, but also strong leaders. As he puts it: “Yes, strong institutions are very important and in case of democracy, strong democratic institutions are vital to the sustainability of democracy but also important are strong leaders. So, there must be a distinction between strong leaders and strong institutions but it is important to have a combination of both”.

I will return to Gambari’s argument later. However, what leaves me baffled is that these same people who argue for strong institutions are the same people who also support actions that destroy institutions. They are the first to support actions that promote strong man rule even while vehemently arguing for the establishment of strong institutions.

This leaves me confused and unable to understand exactly what these fellows mean by institution. If I am to hazard a guess, and seeing the way most Nigerians use it in arguments, I will say that many Nigerians mean by institutions structures or agencies of government that works. In time, we even begin to call those agencies national institutions – and so when institutionalists argue for the building of strong and enduring institutions, many Nigerians naturally assume that to mean government agencies that are functional. Yes, institutions could mean organisations or agencies, but they are far more. They are principally “rules of the game”; procedures that structure social interaction by constraining and enabling actor’s behaviour. They are the planks on which successful and prosperous societies are built.

In their brilliant and engaging study on Why Nations Fail, Daren Acemoglu and James Robinson provide answers to questions that have stumped experts for centuries: why are some nations rich and others poor, divided by wealth and poverty, health and sickness, food and famine? They considered lots of factors ranging from location/geography, weather, culture or even education and knowledge of best policies but discounted them all. For them – and many other academics – the distinguishing factor is the presence of strong and enduring economic and political institutions. These are the guarantors of success. Societies therefore that devoted time to building such institutions (read a capable state that, in the words of Ricardo Hausmann, “can protect the country and its people, keep the peace, enforce rules and contracts, provide infrastructure and social services, regulate economic activity, credibly enter into inter-temporal obligations, and tax society to pay for it all”) are ultimately successful while those that depend on rule by philosopher kings, moralists and strongmen do are not and ultimately become poor and fail.

Even without this engaging study, we know from “history that strong institutions are the best guarantee of progress and sustainable growth and development in any society. Institutions are impersonal and not subject to the whims, caprices, flimsy and erratic nature of human behaviour. Reforms based on personalities, personal rule or individuals fizzle out eventually. What is more, human nature is erratic and does not guarantee consistency. History has shown that it is not always possible to get excellent people to run institutions over time. Weak and sometimes, morally bankrupt individuals get into positions of authority. The key difference however is that in societies where institutions are strong and well entrenched, they withstand or survive such persons without considerable damage. However, where institutions are weak or non-existent, all previous progress is destroyed and the society or organisation had to start afresh after such weak or bankrupt individuals depart.”

They forget that sooner than later, a “king that does not know Joseph” will ascend the throne and, in the absence of institutions, reverse whatever reforms they think they have enacted. Ultimately, they would only have succeeded in dragging the country back by decades.

That is why I get worried when the administration systematically destroys institutions in the name of fighting corruption or national interest(s) and Nigerians who know better keep quiet or even try to justify the actions. It is also shocking to hear one of the leading lights of this administration who obviously knows better, Malam Nasir el’Rufai, in 2017, tell the Central Bank of Nigeria to either cut the interest rate or have it cut for it by fiat. Really?

That is why I am prepared to cut Ibrahim Gambari some slack because he was open with his preference for strong man rule. But these pseudo intellectuals will argue for institutions with one side of the mouth and act in ways that clearly show their preference for strong man rule.

They will argue for institutions – rules that constrains all actors – but they will openly encourage the President to circumvent the law; to detain indefinitely people they consider security threats even against the judgements of competent courts; to refuse bail to suspects even when they have been granted bail by competent courts; to arrest indiscriminately, violate people’s rights (while disingenuously arguing that those people first violated Nigerians’ rights), interfere with the independence of the Central Bank, temper with rules to achieve quick but fleeting results. But they forget that they are actually destroying the country; that any little progress they think they are making will fizzle out with time and the country will be worse for it. They forget that sooner than later, a “king that does not know Joseph” will ascend the throne and, in the absence of institutions, reverse whatever reforms they think they have enacted. Ultimately, they would only have succeeded in dragging the country back by decades.

We must be resolute in reminding these pseudo intellectuals that institutions are the only means of building a virile, rich and successful society.

This article was first published December 6, 2018



Whatsapp mobile

Get real time updates directly on you device, subscribe now.

Comments are closed, but trackbacks and pingbacks are open.