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Regulating democracy for economic development 16 Jun 2022

As Nigerian political parties hold primary elections to elect candidates for the general election in 2023, the question about how democracy will shape economic and social development, post the pandemic, has become pressing.

The relationship between democracy and economic development has been hotly contested in the history of development. In the era of struggles against colonialism, many African leaders and scholars embraced dependency theory. The idea is that Africa underdevelopment is a consequence of its entrapment in the unfair economic relationship between the metropoles and the satellites. Dependency theory established a relationship between political order and economic outcomes that required erstwhile colonies to focus attention on collectivizing political consciousness in order to mobilize energies in a coherent and concentrated manner.

Breaking away from dependency required an activist state. It was believed that electoral democracy, with its riotous intersubjectivity, would undermine economic development. African countries that embraced a variant of dependency theory also embraced export substitution policy that is generally adjudged to have stagnated economic growth in the continent. The highpoint is that those who adopted such dirigiste policy also adopted a variant of one-party state and authoritarian rule.

Dependency theory is no longer in good standing in economic scholarship. But the search for a political order that guarantees economic development has continued unabated. At the height of neoliberalism, the prevailing idea was to fashion the institutions and the structure of power and social relations in the exact image of the advanced western democracies, that is, the American Business Model (ABM). This launched the wave of democratization in the African continent. But ‘democratization’ has produced neither sustained economic development nor stable polities in much of Africa, particular West Africa, where flawed elections have led to violent conflicts.  The crisis of democracy and the consequent failure of development in Africa have resurfaced the debate about the value of democracy to the quest for development and stable social order.

As Nigeria prepares for another round of general election, the challenge remains how to ensure that electoral democracy results in sustained and inclusive economic growth. What needs to be done to make sure democracy does not further destroy institutions of production and conflict management? How do we provide sufficient incentives for public officials to invest resources in productivity and mainstream the wellbeing of the citizens in public expenditure and in the use of the coercive power of the state?

In its 2019 report on poverty and inequality in Nigeria, the global antipoverty NGO, the Oxfam, argues that Nigeria’s high poverty rate results mainly from low investment in important social sectors and erosion of legal protection of social and economic rights in labour laws. These reflect the singular failure of electoral democracy to engender sustained and fair economic growth.

The failure of democratic politics in Nigeria to yield economic and social wellbeing for most Nigerians is a result of the poor regulatory landscape of Nigeria’s electoral democracy. It is not fortuitous. It flows from the logic of the institutional arrangement of electoral democracy in Nigeria. That institutional arrangement could be approximated to a perverse form of elitism. Because the economic design of the Nigerian society does not robustly link rulers and citizens in symbiotic relationships, the ruling elites are prone to overlook the needs and even tragedies of the citizens. There is little to gain by investing in the poor and little to lose for not paying attention.  

The economics of public leadership shows in the contrasting responses of government to threat by university teacher to shut down schooling and threat by airline operators to shut down air travel. Both groups were concerned about working conditions. Public universities have been shut down in Nigeria for about three months and there has been no serious intervention by the government. The government did not even allow airline operators to shut down for a day before it realigned policy to address their concerns. With children of the ruling elites mostly schooling abroad and in private schools in Nigeria, there is little incentive to address the crisis of public education. But elites are completely dependent on air travel for business and social transactions. Nigerian roads are death-traps. Whatever it takes to get the airlines back to business receives high level executive attention.

So, addressing the impoverishment of the Nigerian citizens through electoral democracy requires that the incentive structure of politics is designed to increase the costs of misusing public policy against the welfare of citizens and enhancing the political benefits of mainstreaming the poor in service delivery.

The new electoral law has one such incentive structure in the requirement of internal democracy. But the result of the PDP presidential primary shows that this incentive structure is inadequate; and requires to be supplemented with an activist but professional electoral management body able to constrain political actors and enhance the power of citizens to force the ruling class to be accountable and responsive.

Except the regulation of electoral democracy enhances the capacity of citizens to understand the impact of public policy and constrain leaders to respond to their needs through internal party democracy and truly fair and free elections, democracy has no potential to drive up social wellbeing of the 100 million very poor Nigeria.

So far, based on quality of the constraints in the electoral regime, there is little hope that democracy will improve the wellbeing of the citizens.

Sam Amadi, PhD, a former Chairman of the Nigerian Electricity Regulatory Commission, is the Director of Abuja School of Social and Political Thoughts.