Political Order and Political Decay (35 page)

The final reason why a deliberate effort to sequence the introduction of political institutions is problematic is a moral or normative one. Accountability through periodic free and fair elections is a good thing in itself, apart from any effects it may have on the quality of government or economic growth. The right to participate politically grants recognition to the moral personhood of the citizen, and exercise of that right gives that person some degree of agency over the common life of the community. The citizen may make poorly informed or bad decisions, but the exercise of political choice in and of itself is an important part of human flourishing. This is not simply my private opinion; around the world, large masses of people are now mobilized to defend this right of political participation. The Arab Spring of 2011 is just the latest demonstration of the power of the idea of democracy, in a part of the world where many assumed there was a cultural acceptance of dictatorship.

In countries like Prussia and Britain that did experience a sequenced introduction of modern political institutions, the older nondemocratic regimes were traditional monarchies that had their own sources of legitimacy. This is not true for the vast majority of authoritarian countries that emerged in the wake of colonialism in the mid-twentieth century, which were founded in military coups or elite power grabs. The most stable among them—Singapore and China—maintained their legitimacy through good economic performance but do not have clear wellsprings of support like the Hohenzollern dynasty.

For better or worse, then, most contemporary developing countries do not have a realistic option of sequencing, and, like the United States, have to build strong states in the context of democratic political systems. That is why the American experience during the Progressive Era is singularly important. No country today can realistically try to imitate Prussia, building a strong state through a century and a half of military struggle. On the other hand, it is possible to imagine civil society groups and political leaders in democratic countries organizing reformist coalitions that press for public-sector reform and an end to gross corruption. The single most important lesson to be drawn from the American experience is that state building is above all a political act. The structure of a modern state may be specified by certain formal rules (for example, selection of officials based on merit rather than connections), but implementation of these rules inevitably hurts the interests of some entrenched political actors who benefit from the status quo. Reform therefore requires dislodging these actors, working around them, and organizing new social forces that will benefit from a cleaner and more capable form of government.

State building is hard work, and it takes a long time to accomplish. Elimination of patronage at a federal level took over forty years, from the Pendleton Act to the New Deal. In New York, Chicago, and other cities, political machines and patronage survived until the 1960s. I noted that the American political system puts up high barriers to reform, and not every country is like this. Oftentimes countries can make use of external crises like financial meltdowns, disasters, or military threats to accelerate the process. But there are very few historical precedents for this type of political modernization happening overnight.

We saw that state building in Greece was particularly difficult because of the role of outside powers. Greece was ruled for centuries by the Turks; foreigners helped the country win its independence; they imposed Otto of Bavaria as the first king of the newly independent country; they attempted a crash modernization of its political system and continued to intervene to either support or oppose domestic groups like the Greek Communists. All of this weakened the legitimacy of Greek governments, increased levels of distrust in the state, and ultimately failed to produce a fully modernized political system. In a way, the struggle among the European Union, the IMF, and the Greek government over the financial crisis early in the twenty-first century is only the latest version of this ongoing story.

Greece therefore prefigures the topic of the next part of the book, which is the effort to transplant modern political institutions from one part of the world to another. The process of globalization began in earnest with the European voyages of discovery in the fifteenth century and the onset of colonialism, which suddenly brought entire regions of the world in contact with one another. The confrontation of indigenous societies all over the world with Western culture and institutions had profound and often deadly consequences. It also meant that political development would forever cease to be something that happened largely within the confines of a single region or society. Foreign models would be forcibly imposed or voluntarily adapted by locals, with very different conditions for institutional development. Why this process worked better in some parts of the world than in others will be the topic of the following section of this book.

 

PART TWO

Foreign Institutions

 

14

NIGERIA

Political corruption in Nigeria; how Nigeria, despite possessing abundant natural resources, has failed to develop; why this failure is squarely rooted in weak institutions and bad politics; how Nigeria's experience differs from that of other developing countries

While the governments of Greece and Italy differ from their Northern European neighbors with regard to clientelism and corruption, they still possess modern cores and have been able to provide basic public goods at a level sufficient to turn their societies into wealthy developed countries. When we turn to the African country of Nigeria, however, we observe clientelism and corruption of an entirely different order of magnitude and, correspondingly, one of the most tragic development failures in the contemporary world.

Consider the following story related by Peter Cunliffe-Jones, a British journalist who lived in Nigeria for several years, and whose distant relative was a participant in the region's original colonization. A German businessman named Robert married a Nigerian woman and set up a plant to process soybeans in his wife's home state, a crop that was grown locally and for which there was a good market. The business was hard to set up, given the need for machinery that couldn't be purchased locally and a very unreliable electricity supply. With some perseverance, however, Robert and his wife were able to get the plant running. Cunliffe-Jones relates:

Then, three months later, the problems started. After they sold the first cartons of soybean oil, a local government official appeared at the factory gate and said that regulations had been broken in setting up the plant … The council chairman wanted 10 percent of their revenue, paid to a special account, to make the problem go away. Robert refused to pay. He went to the police. The council chairman sent round thugs to smash up his car. The police chief got involved. Not to help, but to demand a cut for himself.

Robert and his wife realized they had to play the game, and paid up. They were left alone for a while, and their business succeeded in making a profit. Then the state governor heard about his operation and demanded a cut for himself:

When Robert again refused to pay, he was arrested for breaking employment laws and bribing officials … To get himself out of jail, Robert had to pay off the governor, the police chief, the council chairman, and the judge now handling the case. He closed the business and sold the equipment to recoup some of his costs. He and his wife then left for Germany … The 200 jobs they had created disappeared with the business. All that remained was an empty warehouse, some unemployed workers, a large pile of soybeans, and a lot of angry farmers.
1

Although this might seem like a typical story about developing world corruption, it raises some troubling questions. The willingness of Robert and his wife to establish a business should have led to a win-win situation for everyone: for the soybean farmers, for the consumers of their products, for the two hundred employees of Robert's company, and indeed for the public officials who would have seen long-term tax revenues rise and who might have been rewarded at the next election for having encouraged the creation of so many jobs. It is not sufficient to say that the officials were personally greedy and chose private gain over public benefit. Even by this selfish calculus, they shortsightedly killed the goose that was laying the golden egg. Once Robert left the country, there was no one from whom they could extract a bribe, no one further to tax. The potential win-win became a lose-lose.

POOR PERFORMANCE

Nigeria is sub-Saharan Africa's largest nation by population, at around 160 million. Nigeria got substantially richer during the great commodity boom of the early 2000s, and the Nigerian government “rebased” its estimate of the size of its 2013 economy to make it suddenly 60 percent larger than prior estimates by organizations like the World Bank. But very little of that money flowed down to its population as a whole.

Figure 11
shows that Nigerian per capita income in the fifty years from 1960 to 2010 grew by some 90 percent, which amounts to a miserable compound annual rate of just over 1 percent per year. In the three decades from the start of the country's oil boom in the 1970s, per capita income actually declined and did not return to its 1979 level until 2005. This performance is poor by the standards of “emerging” Africa, and particularly poor when compared to countries in East Asia. It is perhaps unfair to compare Nigeria to highfliers like South Korea and Taiwan, but as political scientist Peter Lewis has shown, Indonesia provides a highly revealing counterpoint.
2
Like Nigeria, Indonesia is a large (2010 population 233 million), ethnically diverse, oil-rich country. In 1960, Indonesia's per capita income was only 60 percent of Nigeria's. By 2010, it was 118 percent higher.

FIGURE 11.
Per Capita GDP, Constant 2000 US$

SOURCE
: World Bank

What growth there's been in Nigeria over this period was related almost entirely to oil exports. Oil production began in the Niger River Delta in 1958, and the country experienced an economic boom as prices rose during the energy crises of the 1970s. However, oil turned out to be much more of a curse than a blessing in virtually every respect. Nigeria suffered from “Dutch disease,” a phenomenon experienced by Holland during a natural gas boom in the 1950s during which a commodity-led currency appreciation undermined the competitiveness of sectors other than energy. Whereas Nigeria used to export substantial amounts of cocoa, groundnuts, palm oil, and rubber in pre-oil days, it came to be almost completely dependent on oil exports for both export earnings and government revenues.
3
As a major energy producer, Indonesia faced similar challenges but was much better able to promote the growth of nonoil exports and manufacturing. While Indonesia reduced energy as a proportion of exports from 75 to 22 percent between 1975 and 2003, Nigeria's dependence increased. The paltry 4 percent of Nigerian exports not related to energy is testimony to the complete failure to create either a modern commercial agriculture industry or manufacturing sector, which would have been sustainable routes to economic development.
4

It is estimated that from the 1970s to the early 2000s Nigeria took in about $400 billion in oil revenues.
5
Unlike the East Asian export-led economies, this money was not plowed back into investments in either physical or human capital (that is, education). Nor did it have much of an effect on the incomes of ordinary Nigerians: indeed, poverty rates increased dramatically, and other indicators of development, such as child mortality rates, barely budged.
Table 2
shows that, in comparison to Indonesia's relative success at poverty reduction, Nigeria entered the twenty-first century with more than two-thirds of its population living in poverty.

So where did all this money go? The answer, not surprisingly, is that it went into the hands of Nigeria's political elite. That elite centers around a series of ogas, or Big Men, and their patronage networks. Some ogas are descendants of the traditional elite that ruled prior to the arrival of British colonialism, but others are self-made men—former military officers, businessmen, or politicians who succeeded in using the political system to enrich themselves. And some are very rich indeed, like Aliko Dangote, a northern patriarch said to be the richest black person in the world with a 2014 net worth estimated at $25 billion.
6
Many of the worst offenders are state governors, like Diepreye Alamieyeseigha, elected to run one of the poorest states in the Niger delta, who owned properties in London and Cape Town and was found by the British police with £914,000 in cash lying around his flat in 2002.
7

TABLE 2.
Percentage of Population Below the Poverty Line